Cycling offers a range of financial savings to the individual and wider economic benefits that extend throughout the entire community. This fact sheet focuses on the significant economic savings to government and the economy from current and future participation in cycling.


Cycling provides economic benefit in terms of improved public health, reduced levels of traffic congestion and greenhouse gas emissions, as well as reductions in expenditure on transport fuel.


These benefits accrue most readily when the bicycle is used as a substitute for car journeys. Though many trips are too long to be comfortably undertaken by bicycle alone, Graph 1 below highlights that a large proportion of our car trips are of a distance suited to cycling.




Thousands of Australians have already made the switch to cycling. The number of people who cycle to work (sole mode) in Australian cities has increased markedly between Census 2001 and 2006 (rising 28.9% on average).




HEALTH


The direct gross cost of physical inactivity to the Australian health budget in 2006/07 was $1.49 billion


Cycling increases the health of participants and when used as a replacement to car travel, offers additional savings that extend to the wider community. These benefits can be divided into the following categories:


PHYSICAL ACTIVITY

Physical inactivity is one of the major causes of ill health in Australia. In fact, around half the Australian adult population are insufficiently active to protect against sedentary lifestyle disease, such as diabetes (Australian Institute of Health and Welfare, 2006).


The direct gross cost of physical inactivity to the Australian health budget in 2006/07 was $1.49 billion (Econtech, 2007). This translates to $198.57 per adult, per year. Table 2 below illustrates the itemised cost for some of the major diseases affecting the Australian population. Cycling provides a practical, sustainable opportunity to help get more Australians active and drive down the cost of physical inactivity.




In 2006, over 1.68 million Australians cycled for recreation and of those, 417,400 cycled more than 104 times a year (Australian Sports Commission, 2006).


These individuals can be classified as meeting the levels of physical activity to protect against sedentary lifestyle diseases from cycling alone.


Current cycling participation (for recreation and commuting) cuts sedentary lifestyle disease costs by approximately $154 million.


It should be noted that a significant amount of additional transport-based cycling occurs (visiting friends, shops etc...), but are not collected by the Census. According to the Australian Greenhouse Office (2006), around 66% of our journeys are for non-commuting purposes.


MENTAL HEALTH

The World Health Organisation has demonstrated that cycling is an effective method of reducing depression and anxiety (Dora & Phillips, 2000), which combined cost Australian businesses almost $10 billion a year. This includes $6.6 billion for sick days and $3 billion for poor work performance (Hilton, 2005).


AIR AND NOISE POLLUTION

Motor vehicles are a major source of air and noise pollution in Australian cities (Standing Committee on Environment and Heritage, 2005; Commissioner for Environmental Sustainability, 2007; Bureau of Transport and Regional Economics, 2005). Between 900 and 4500 cases of cardio-vascular and respiratory disease occurred due to motor vehicle related air pollution in 2000, costing between $0.4 billion to $1.2 billion. In addition, air pollution caused by motor vehicles accounted for between 900 and 2000 premature deaths, with an estimated cost of between $1.1 billion and $2.6 billion (Bureau of Transport and Regional Economics, 2005).


The impact of air and noise pollution is greatest in dense urban centres. Cycling therefore offers significant potential to reduce this cost, as these areas are also the most amenable to cycling, as trip distance is likely to be shorter than in outer areas.


ROAD TRAUMA

Road trauma in Australia costs $17 billion a year. This is equal to 2.3% of Australia’s gross domestic product (Connelly & Supangan, 2006). There is increasing evidence that higher levels of motor vehicle use increase the risk of road trauma (Litman & Fitzroy, 2005). Graph 2 below provides an indication of the cost incurred by road trauma.




Strategies that provide non-motorised transport options are increasingly recognised as an effective road safety strategy (Litman & Fitzroy, 2005). In fact, policies aimed at reducing car use typically result in around a 10% reduction in vehicle kilometres travelled and this could cut road trauma costs in Australia by between $0.850 billion and $1.7 billion per year (Victoria Transport Policy Institute, 2007).


SAFETY

The number of cyclists in London has jumped 83% and yet the number of serious crashes involving cyclists has fallen proportionally by 28% (Greater London Authority, 2007). This finding is consistent with domestic and international data demonstrating that as cycling rates double, the risk per kilometre falls by around 34% (Jacobsen, 2003, cited in Robinson, 2005).




 

CONGESTION REDUCTION


The primary cause of congestion is private automobile use (Bureau of Transport and Regional Economics, 2007). The Bureau of Transport and Regional Economics found that the cost of avoidable congestion in 2005 was $9.4 billion. Avoidable congestion is described as situations where the benefits to drivers of travel in congested conditions are less than the costs imposed on other members of the community. This cost is composed of:


  1. Business time costs $3.6 billion

  2. Private time costs                        $3.5 billion

  3. Extra vehicle operating costs       $1.2 billion

  4. Extra air pollution costs                $1.1 billion


By 2020, the Bureau of Transport and Regional Economics estimate that congestion costs in our capital cities will soar to $20.4 billion (2007), with each capital showing the growth illustrated in Graph 4 below.




Current commuter cycling reduces the cost of congestion by approximately $63.9 million per annum (Bauman et al, 2008).


The encouragement of cycling is a cost effective response to the challenge posed by traffic congestion (Austroads, 2005; Litman, 2004). Once again, congestion intensity is at its greatest in the areas most suitable for cycling – urban areas, where trip distances are likely to be shorter.


GREENHOUSE GAS ABATEMENT


Transport is a significant and growing source of these emissions. The Australian Greenhouse Office reports that 34% of household emissions are generated from motorised transport (2006). Transport emissions rose 30% between 1990 and 2005 and this is expected to soar 67% above 1990 levels by 2020 (Department of Climate Change, 2008).


Cycling, as a zero-emission form of transport, offers substantial and currently untapped potential to lower emissions in the passenger transport sector. In addition to not emitting greenhouse gases, cycling is a cost-effective option, with negligible running costs. There is no question that improvements in vehicle technology will be necessary to reduce greenhouse gas emissions, but unlike a number of ‘high tech’ options, bicycles are an equitable, off-the-shelf option that can be deployed immediately.


Even with the current lack of appropriate bicycle infrastructure in Australian cities, cycling to work in 2006 accounted for 189,392,000km travelled in Australian capitals (derived from Census 2006 data). This amounts to a greenhouse gas saving of 45,000 tonnes per year (Bauman et al, 2008). At $40/tonne, this equates to $1.8 million per year.




FUEL COSTS


Oil is central to the Australian economy and community. Car use is the major consumer of oil in Australia.


The chart below illustrates that the majority (61%) of fuel consumption for road transport can be attributed to car use.




Concerns over oil depletion raise serious questions about Australia’s long term energy needs and future prosperity. Australian oil production peaked in 2000/01 (Geoscience Australia, 2006), resulting in greater dependence on imports – often from unstable regions of the world. In fact, only 53% of Australian oil consumption is from domestic production (Australian Bureau of Agricultural and Resource Economics, 2008). By 2020, this is expected to drop to 27% (Australian Petroleum Production and Exploration Association, 2007). Graph 7 highlights that Australia is growing increasingly reliant on imports.




“With only about a decade of known oil resources remaining at today’s production rates, Australia is looking down the barrel of a $25 billion trade deficit in petroleum products by 2015” (The Hon Martin Ferguson AM MP, APPEA Conference, 7th April, 2008).


Automotive gasoline imports have jumped 209.8% between 2000/01 to 2005/06. Over the same period, domestic crude oil production dropped by 37.2% (Australian Bureau of Statistics, 2008). Using figures from the 2006 Census, commuter cyclists in Australian capital cities save approx. $35 million on fuel (calculated at 2008 prices).


It is now increasingly clear that excessive car use is having negative economic repercussions. The soaring cost of oil, spiralling rates of obesity and congestion as well as mounting concern over climate change reinforces the urgent need to assess our current transport behaviour and seek practical, sustainable alternatives.


Cycling is not just good fun, it’s a good investment. Cycling has emerged as a smart way of simultaneously tackling theconverging issues of rising fuel costs, climate change, inactivity and congestion.


To increase our economic productivity in a sustainable manner, it is recommended that government:

• Lower traffic speeds in urban areas and implement traffic calming: this is the most effective way to increase real and perceived safety for all road users

• Separate cars and bicycles on key routes, with bike lanes or dedicated cycling paths that are clearly signposted and marked

• Connect bicycle lanes with good intersection treatments, including ‘bicycle streets’ where people on bikes have right of way

• Create seamless connections between cycle ways and public transport

• Develop first class end of trip facilities, such as the Cycle Centre in Brisbane, with secure bicycle storage, showers and change rooms

  1. Introduce extensive driver education to raise motorists’ awareness of cyclists’ use of the roads and relevant road rules.


REFERENCES


References and further information available at:

www.cyclingpromotion.com.au

 

ECONOMIC BENEFITS

OF CYCLING

RESEARCH FROM THE CYCLING PROMOTION FUND