2013-12-18

Co.Exist

A Little Less Driving Means Big Dividends For Local Economies

People who drive less give less money to distant oil corporations, but give a lot more to the local economy.

Driving is expensive. Running a sedan for a year costs $9,122 on average, according to the American Automobile Association, with gas prices contributing a big part of that sum. The average U.S. household spent $4,000 on fuel in 2012.

Helping people to drive less could lead to big savings, as a new analysis by CEOs for Cities shows. If everyone in the 51 largest metro areas reduced driving by one mile per day on average, the U.S. as a whole could save $31 billion a year. And here's the thing: that money would likely go to more productive use than it does today being tied up in the fossil fuel economy.

"The money saved from driving less is much more likely to be spent in the local economy, aiding local businesses and creating local jobs," the report says. "Because few metropolitan areas manufacture cars or gasoline (most import both from other cities or nations), the bulk of the money local consumers spend on buying and operating cars leaves the local economy immediately. In contrast, other expenditures, such as housing, services, and entertainment, are more likely to stay in the local economy."

The report is written by Joe Cortright, a longtime advocate of the so-called "green dividend." His calculation is based on a driving cost of 50 cents per mile and 168 million people living in those metro areas. Over a year, a reduction of one mile per day works out at 60 billion fewer miles overall. But the accounting doesn't include potential environmental benefits--which are icing on the cake. One mile a day less driving equates to 3 billion gallons of gas saved per year, and 30 million tons less carbon emissions, Cortright says.

Dense cities where owning a car isn't necessary already have an advantage over more auto-dependent places. New Yorkers spend $19 billion less on driving than friends in other cities, for example. It's money they can use to pay for the higher rent, or for other local spending.

The report says cities can win green dividends by creating "strong urban cores and neighborhoods with a mix of uses"; investing in public transit, allowing people to travel less; by focusing on walkability and cycling infrastructure; and enabling car sharing. "A significant and valuable green dividend is in the offing for those cities that foster opportunities for their residents to drive less," the report concludes.

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