Cost-effectiveness of reductions in greenhouse gas emissions from High-Speed Rail and urban transportation projects in California

A rising trend in state and federal transportation finance is to invest capital dollars into projects which reduce greenhouse gas (GHG) emissions. However, a key metric for comparing projects, the cost-effectiveness of GHG emissions reductions, is highly dependent on the cost-benefit methodology employed in the analysis. Our analysis comparing California High-Speed Rail and three urban transportation projects shows how four different accounting framings bring wide variations in cost per metric tonne of GHG emissions reduced. In our analysis, life-cycle GHG emissions are joined with full cost accounting to better understand the benefits of cap-and-trade investments. Considering only public subsidy for capital, none of the projects appear to be a cost-effective means to reduce GHG emissions (i.e., relative to the current price of GHG emissions in California's cap-and-trade program at $12.21 per tonne). However, after adjusting for the change in private costs users incur when switching from the counterfactual mode (automobile or aircraft) to the mode enabled by the project, all investments appear to reduce GHG emissions at a net savings to the public. Policy and decision-makers who consider only the capital cost of new transportation projects can be expected to incorrectly assess alternatives and indirect benefits (i.e., how travelers adapt to the new mass transit alternative) should be included in decision-making processes.