For decades, infrastructure investment and public policy have supported the increased use of cars for personal transport, making them indispensable in cities. However, the proliferation of cars has also led to increased awareness of their adverse effects on society. Traffic congestion alone costs European economies around 1% of GDP annually. The majority of cars are still fuel-based contributing carbon emissions, and even when they are electric, they contribute to air pollution through particles from breaks and tyres, harming our health.
Despite all these well-known harmful side effects of driving, an important social cost is often overlooked: the opportunity cost of not walking, cycling, including to public transport stops. Regular exercise is widely recognized for its health benefits, yet many people struggle to integrate it into their daily routines. Research shows that most people underestimate how much physical activity can reduce the risk of cardiovascular disease, cancer, depression, dementia, and other health conditions. In the UK, every mile driven instead of walked or cycled costs approximately $2.91, and in the US, it costs a staggering $8.25. These costs are significantly higher than other social costs of driving.
To mitigate the adverse effects of car use, governments have implemented diverse policy solutions. These include exhaust particulate filters to reduce air pollution and fuel economy standards to lower vehicle fuel consumption and greenhouse gas emissions. The most typical intervention is the fuel tax, which aims to reduce car use and encourage the purchase of more fuel-efficient vehicles.
Calculations of optimal fuel taxes have, however, not traditionally accounted for the cost of inactivity. Our new research that includes this cost component finds that optimal fuel tax rates would increase by 38% in the UK and by 44% in the US. Although using fuel taxes to promote physical activity is an indirect strategy, it can still significantly impact active travel. In the UK, around 40% of all trips are under two miles, and nearly 70% are under five miles, distances that can be covered without a car. Even walking to and from public transport is found to be highly effective in improving people’s health. In addition, increased walking or cycling does not typically come at the expense of other exercise.
Some argue that using transport policy to increase fitness is paternalistic and impinges on personal choices. Urban areas offer a unique opportunity to incorporate exercise into daily commuting routines, however. The healthcare system bears high costs for diseases that walking and cycling can help reduce. If society fails to increase the general population's fitness, it will face higher health insurance premiums or increased taxes to fund healthcare.
This study was published in Economica. This text is partially adapted from an earlier version published at https://blogs.lse.ac.uk/politicsandpolicy/economic-transport-policy-should-prioritise-physical-activity/.
van den Bijgaart, Inge, David Klenert, Linus Mattauch, Sulikova, Simona (2024). Healthy climate, healthy bodies: Optimal fuel taxation and physical activity. Economica 91(361), 93–122.
