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The costs of increased air pollution emissions and the benefits of emission reductions.


  • A traffic artery is widened, increasing the vehicle miles traveled (VMT) for the street, but decreasing vehicle-hours on this and other streets.
  • A transit system converts from diesel buses to compressed natural gas buses, reducing emissions.
  • A vanpool program is created, reducing total vehicle trips.


To quantify project air pollution impacts it is necessary to:

  • Estimate the changes in vehicle-miles, vehicle-hours and vehicle-trips for different classes of vehicles, and develop a model that quantifies how the project will affect the quantity and mix of air pollution emissions.
  • Apply an appropriate dollar value per unit of emissions.
  • Based on the estimate, calculate the project's benefits.

To prioritize projects that would reduce emissions:

  • Determine the cost of each project.
  • Estimate the change in vehicle miles traveled (VMT), vehicle-trips, and vehicle-hours that will result from each project.
  • Calculate the cost per unit of emission reduction.

Regardless of whether a project will increase or reduce emissions, a benefit-cost model can be used to estimate any change in emissions and calculate its positive or negative benefit. For projects that reduce emissions, the cost-effectiveness of several projects can be compared by finding the cost of each unit of pollution reduction.

Types of Emissions

Motor vehicles produce various harmful air emissions, as summarized the table below. Even electric cars, trains, and buses are responsible for emissions, since the electricity they use is often generated by fossil fuels such as coal or natural gas. These emissions can cause various human health and environmental damages. Some of these impacts are localized, so where emissions occur affects their costs, while others are regional or global, and so location is less important.

 Vehicle Air Pollution Emissions (Litman 2009)




Harmful Effects


Carbon dioxide (CO2)

A product of combustion.

Fuel production and tailpipes.

Climate change


Carbon monoxide (CO)

A toxic gas caused by incomplete combustion.


Human health, climate change

Very local


A class of durable chemicals.

Air conditioners and industrial activities.

Ozone depletion, climate change


Fine particulates (PM10; PM2.5)

Inhaleable particles.

Tailpipes, brake lining, road dust, etc.

Human health, aesthetics.

Local and Regional

Road dust (non-tailpipe particulates)

Dust particles created by vehicle movement.

Vehicle use, brake linings, tire wear.

Human health, aesthetics.



Element used in older fuel additives.

Fuel additives and batteries.

Human health, ecological damages


Methane (CH4)

A flammable gas.

Fuel production and tailpipes.

Climate change


Nitrogen oxides (NOx) and nitrous oxide (N2O).

Various compounds, some are toxic, all contribute to ozone.


Human health, ozone precursor, ecological damage.

Local and Regional

Ozone (O2)

Major urban air pollutant caused by NOx and VOCs combined in sunlight.

NOx and VOC

Human health, plants, aesthetics.


Sulfur oxides (SOx)

Lung irritant and acid rain.

Diesel vehicle tailpipes.

Human health and ecological damage

Local and Regional

VOC (volatile organic hydrocarbons)

Various hydrocarbon (HC) gasses.

Fuel production, storage & tailpipes.

Human health, ozone precursor.

Local and Regional

Toxics (e.g. benzene)

Toxic and carcinogenic VOCs.

Fuel production and tailpipes.

Human health risks

Very local

This table summarizes various types of motor vehicle pollution emissions and their impacts.

Efforts to reduce transportation emissions, and therefore the need to evaluate emission reduction benefits, are several decades old. Over time the scope of emissions considered in analysis has expanded. In addition to concern about "conventional" air pollutants that pose direct human health risks, there is is now growing concern about environmental risks and damages, particularly climate change, which results from air emissions that increase atmospheric solar gain, and therefore average global temperatures, and in other ways disturb ecological functions. These risks are complex and long-term, and therefore difficult to quantify and monetize. In response, many jurisdictions and organizations have established climate change emission reduction targets, and emission markets have been established through which people can purchase emission rights and reductions. This establishes a basis for monetizing climate change emission costs, although the field is still developing and changing (Litman 2009).

Many experts emphasize the importance of using lifecycle analysis when calculating emissions, which takes into account total emissions including those that occur "upstream" during production of infrastructure, vehicles and fuel, during use, and "downstream" during disposal (Chester and Horvath 2008).


AEA Technology (2005), Damages Per Tonne Emission of PM2.5, NH3, SO2, NOx and VOCs From Each EU25 Member State, Clean Air for Europe Programme, European Commission (

Booz-Allen & Hamilton Inc. (1999), California Life-Cycle Benefit/Cost Analysis Model (Cal-B/C) Technical Supplement to User's Guide. California Department of Transportation (Caltrans). Available at:

Mikhail Chester and Arpad Horvath (2008), Environmental Life-cycle Assessment of Passenger Transportation: A Detailed Methodology for Energy, Greenhouse Gas and Criteria Pollutant Inventories of Automobiles, Buses, Light Rail, Heavy Rail and Air v.2, Paper vwp-2008-2, UC Berkeley Center for Future Urban Transport ( Available at:

John Davies, Michael Grant, John Venezia and Joseph Aamidor (2007), “Greenhouse Gas Emissions of the U.S. Transportation Sector: Trends, Uncertainties, and Methodological Improvements,” Transportation Research Record 2017, TRB (, pp. 41-46. Available at:

Mark A. Delucchi (2003), A Lifecycle Emissions Model (LEM): Lifecycle Emissions from Transportation Fuels, Motor Vehicles, Transportation Modes, Electricity Use, Heating and Cooking Fuels, and Materials, ITS-Davis, Publication No. UCD-ITS-RR-03-17 ( Available at:

Mark A. Delucchi (2005), A Multi-Country Analysis of Lifecycle Emissions from Transportation Fuels and Motor Vehicles, Institute of Transportation Studies, University of California Davis ( Available

DfT (2009), Transport Analysis Guidance: 3.3.5: The Greenhouse Gases Sub-Objective, Department for Transport ( Available at:

EDRG (2007), Monetary Valuation of Hard-to-Quantify Transportation Impacts: Valuing Environmental, Health/Safety & Economic Development Impacts, NCHRP 8-36-61, National Cooperative Highway Research Program ( Available at:

ITDP and CAI-Asia Center (2010), Transport Emissions Evaluation Models for Projects (TEEMP), Clean Air Initiative for Asian Cities ( and the Institute for Transportation and Development Policy (; at These Excel-based TEEMP models were developed for evaluating the emissions impacts of Asian Development Bank’s transport projects ( and were modified and extended by ITDP, CAI-Asia and Cambridge Systematics for the for Global Environmental Facility ( Scientific and Technical Advisory Panel (STAP). The Manual for Calculating Greenhouse Gas Benefits of Global Environmental Facility Transportation Projects ( provide step-by-step instructions for developing baseline and impact estimations for various types of transport policies and projects, including transport efficiency improvement, public transport, non-motorized transport, transport demand management, and comprehensive transport strategies.

Todd Litman (2009), "Air Pollution Costs," Transportation Cost and Benefit Analysis, Victoria Transport Policy Institute ( Available at

M. Maibach, et al. (2008), Handbook on Estimation of External Cost in the Transport Sector, CE Delft ( Available at:

Muller and Mendelsohn, (2009). Efficient Pollution Regulation: Getting the Prices Right. American Economic Review, 99:55, 1714-1739.

Nadine Unger, et al. (2011), “Attribution Of Climate Forcing To Economic Sectors,” Proceedings of the National Academy of Sciences of the U.S. ( at

Urban Transportation Emissions Calculator ( provides tools for estimating greenhouse gas (GHG) and criteria air pollution emissions from various types of vehicles.

USEPA (2008), MOBILE Model (on-road vehicles), ( Available at:

Zhang, Anming, Anthony E. Boardman, David Gillen and W.G. Waters II (2005), Towards Estimating the Social and Environmental Costs of Transportation in Canada, Centre for Transportation Studies, University of British Columbia (, for Transport Canada. Available at: