Beyond Highways: How States and Cities Can Fund Low-Carbon Transportation through the Bipartisan Infrastructure Law

May 5, 2022

Article by Devashree Saha (World Resources Institute), James Bradbury (GCC), Joseph Kruger (GCC), Dan Lashof (World Resources Institute), Franz Litz (Litz Strategies). This article also appears on the WRI website.

U.S. President Biden has touted the potential climate benefits of the Bipartisan Infrastructure Law, which makes historic investments in transportation, the country’s largest and fastest-growing source of greenhouse gas emissions. But while the bill’s investments could significantly lower transportation emissions, those reductions are not guaranteed. In fact, analysis from the Georgetown Climate Center found that transportation investments funded by the bill could actually increase carbon emissions, depending on how highway funding and other programs are implemented by states, cities and regional agencies.

How the Bipartisan Infrastructure Law Funds Transportation

The Bipartisan Infrastructure Law includes one of the largest-ever one-time investments in roads, bridges, transit and rail, with surface transportation accounting for $600 billion of the roughly $1 trillion dollars authorized over a five-year period. This includes historic levels of dedicated funding for transit and passenger rail, creating an opportunity to provide more low-carbon transportation options.

The majority of funding goes toward federal highway programs, but states have significant discretion in how they can invest this money. Although most highway funding is distributed to states through formulas written into the Bipartisan Infrastructure Law, the U.S. Department of Transportation (USDOT) recently encouraged cities to work with their states to get a share of these funds.

The topline takeaway is that states don’t actually have to spend federal highway funds on roads. 

For instance, the Surface Transportation Block Grant (STBG) Program — the second-largest formula-funded program in the law, which will provide $70 billion to states over the next five years — provides flexible funding that can be used for road construction, pedestrian and bicycle infrastructure, mass transit and electric vehicle charging stations. Furthermore, up to 50% of funding apportioned to the National Highway Performance Program (NHPP) — long seen as a car-centric, highway-only program — can be transferred to programs that fund transit in National Highway System corridors as well as infrastructure like bike lanes and pedestrian walkways.

Why States and Cities Should Think Beyond Road Expansion

Indeed, research underscores the many reasons states and cities should think beyond roads when spending transportation funds. For one, road expansion does not actually ease congestion, because increasing a road’s capacity increases the number of people who use it, an effect known as “induced travel” or “induced demand.” Studies (see here and here) show that every 10% increase in highway capacity leads to a corresponding 10% increase in vehicle miles traveled within five to 10 years.

A growing body of research (see here and here) also shows that investing in cleaner modes of transportation — including public transit, cycling and walking — offers significant public health benefits by reducing emissions, improving air quality, decreasing injuries from motor vehicle crashes, and increasing physical activity levels.

The shift towards cleaner modes of transportation can also benefit communities of color and low-income communities. These groups have historically faced higher rates of exposure to pollution from transportation due to decades of systemic discrimination influencing where highways, bus and truck depots, ports and other polluting infrastructure are located.

Learning from the Leaders: States and Cities Directing Funds Toward Clean Transportation

Some states and cities are already showing the way to smarter transportation spending. Existing policies and initiatives provide examples to other jurisdictions in how they could use transportation investments from the Bipartisan Infrastructure Law in climate-smart and equitable ways.      

Here are a few examples:

  • Colorado approved a new rule requiring its Department of Transportation (DOT) and the state’s five metropolitan planning organizations to measure the greenhouse gas emissions impact of planned projects and offset them if they exceed a certain amount. This follows the passage of Senate Bill 21-260 in May 2021, which creates new sources of transportation funding by imposing modest fees on gasoline and diesel fuel purchases, electric vehicle registrations, residential deliveries and rideshare trips. Estimated to raise $5.4 billion cumulatively by 2031, it will pay for road repair and expansion of electric vehicle incentives, public transit and air pollution mitigation projects.
  • California Senate Bill 743 now requires cities, counties and other public agencies to use vehicle miles traveled (VMT) as the new metric to analyze a project’s impact under the California Environmental Quality Act. Earlier projects were evaluated on the basis of Level of Service, or the capacity of infrastructure to handle increased traffic flow. Incorporating VMT as a metric has many benefits, including lower emissions, reduced traffic fatalities, greater access to public transit and more sustainable land use decisions.
  • Virginia’s DOT is using Smart Scale to evaluate, score and rank all capital projects — ranging from major highways to local bicycle and pedestrian infrastructure — for funding based on six policy goals: improving safety, reducing congestion, increasing accessibility, contributing to economic development, promoting efficient land use and improving the environment. The six policy goals are represented by 14 quantitative metrics, enabling a more transparent, data-driven project prioritization process. Since the launch of Smart Scale, Virginia’s spending on transit, biking and walking increased significantly, despite a drop in total available funds.
  • The Minnesota Department of Transportation (MnDOT) formed a Sustainable Transportation Advisory Council to help determine strategies to decarbonize the state’s transportation sector. MnDOT adopted a number of recommendations made by the Council, including setting a preliminary goal of reducing VMT by 20% by 2050.
  • Los Angeles County Metropolitan Transportation Authority (Metro) started a Traffic Reduction Study in 2020 to explore if, where and how a traffic reduction pilot program that includes congestion pricing and investments in high-quality transportation could manage traffic demand and make it easier for everyone to get around. The study is also exploring whether low-income assistance programs can address some commuters’ inability to afford the tolls and improve equity outcomes. Metro anticipates submitting a proposed pilot program to the Metro Board for approval in 2023, with potential implementation in 2026.

5 Principles for How States and Cities Should Spend Transportation Funds from the Bipartisan Infrastructure Law

While the above examples highlight efforts by a few states and cities that are expanding transportation options while limiting investments in highway expansion, realizing the GHG reduction potential of the Bipartisan Infrastructure Law means low-carbon investments like these need to become the norm rather than exceptions. States and cities will face choices in the coming months and years on how they want to spend the Bipartisan Infrastructure Law’s transportation-related funding. Where they direct this money will have a big and potentially long-lasting influence on the future trajectory of GHG emissions.      

We propose decision-makers observe five key principles to help ensure that transportation investments decarbonize the transportation sector while enhancing public health and economic well-being for all communities:

1. Prioritize a fix-it-first approach.

The Federal Highway Administration released guidance in December 2021 that advises states and cities to prioritize fixing existing roads before allocating federal funding to highway expansion projects. The American Society of Civil Engineers estimates that 43% of the 4 million miles of U.S. public roadways are in poor or mediocre condition and will need $560 billion in investment. New research from the National Bureau of Economic research found that the impact of damaged roads is much higher than previously estimated in terms of higher vehicle operating costs, reduced traffic safety and longer travel times. A maintenance-first mindset not only makes good fiscal sense, but is also more climate-friendly than building new highway lanes. Every repair project is also an opportunity to redesign the road to a more multimodal, safe, climate-friendly and equitable design.

2. Evaluate transportation projects' potential impact on emissions.

In some cases, communities will need new highways. However, fully accounting for the potential impact of highway construction on emissions and surrounding communities will enable states and cities to make better decisions. The examples highlighted earlier show how this can be done, and there are tools to help.

RMI’s State Highway Induced Frequency of Travel (SHIFT) tool can estimate the impact of highway expansion in 300 metropolitan areas by calculating the number of cars added and the resulting emissions. FHWA is planning to propose a rule to establish a method for measuring and reporting GHG emissions from on-road transportation, which will increase transparency and accountability for the impacts of planning decisions by state departments of transportation and metropolitan planning organizations (MPOs). In addition to emissions metrics, other criteria that track congestion, fatalities and injuries, and freight movement improvement can also help measure transportation projects’ success. Having these measures in place can also spur investments in public transit and vehicle electrification as the real costs of investing in highway and road projects become clearer.

3. Factor in equity when assessing benefits of transportation infrastructure projects.

The planning and implementation of highway projects has historically disproportionately impacted Black and other communities of color by demolishing entire neighborhoods and dividing communities along racial lines. Moreover, 27% of Black households and 17% of Hispanic households do not own a car, and are thus much more likely than white households to use transit. (Only 10% of white households do not own a car.) 

Amidst a national conversation on race and equity, some jurisdictions are trading highways for connected streets that create space for public transit, walking and biking. Highway removal projects are planned, under construction, or completed in several cities, including Rochester, NY; New York City; Boston, MA; Milwaukee, WI; Chattanooga, TN; Oakland, CA and Portland, OR.

Another example of a city prioritizing equity in its transportation system comes from L.A. Metro, which launched Metro Micro, a micro-transit service currently operating in nine zones in the city. The service offers on-demand shared rides to users within a fixed zone for $1 per ride, thereby targeting underserved populations not covered by Uber or Lyft. Metro Micro is a public-private partnership between L.A. Metro and RideCo., a Canadian rideshare company. The service is structured around a network of “virtual bus stops,” established largely by RideCo. These stops are dynamic and can be altered depending on demand, traffic or other concerns.

The Bipartisan Infrastructure Law’s Reconnecting Communities Pilot Program will provide $1 billion over five years to projects that remove or retrofit highways and other legacy infrastructure that obstruct the connectivity of communities. Furthermore, states will likely have broad discretion regarding how they spend the over $6 billion dollars for low-carbon transportation that will be available through the Carbon Reduction Program, a majority of which could be directed toward projects that directly benefit overburdened communities. While these programs offer exciting opportunities to create a more equitable transportation system, rectifying the decades-long inequities of the existing system will require that equity goals are embedded in every transportation program, including the NHPP and STBG, the two largest transportation programs funded by the Bipartisan Infrastructure Law

4. Make safe and affordable access a primary purpose of transportation programs.

Accessibility — the ability of people to reach desired services and activities — is driven by a number of factors, including the quality (availability, frequency, etc.) of travel modes, land use development patterns that affect distances between destinations, the quality of connection between modes, safety and affordability. For example, when local streets are designed to move vehicles at the highest speed possible, it creates barriers to walking and bicycling, forcing people to drive for even very short trips. People are more able to choose lower-carbon transportation options when they have safe, affordable and reliable access to multiple options.      

Fortunately, a growing number of cities — including Portland, OR; Boulder, CO; Washington, D.C.; and Austin, TX — are investing in expansive and protected biking networks to reduce congestion and pollution, lower injury rates and improve public health. The average share of new biking infrastructure that is protected increased from 57% in 2016 to 78% in 2020 among 13 U.S. cities. These are biking lanes designated as exclusive space for bicyclists and include physical separation from adjacent motor vehicle traffic.      

Cities still have considerable work to do in terms of providing access to protected biking networks, which will take significant investment. The Bipartisan Infrastructure Law’s Transportation Alternatives Program (TAP), which includes $7.2 billion over five years, can further support city efforts on this front.     

5. Think strategically about the relationships between land use and transportation.

Traditional transportation goals focus on increasing travel speeds and reducing delays. This leads to solutions that prioritize building new or wider roads and improving existing roads. Thinking more strategically about land use and transportation relationships can bring multiple benefits, including reduced VMT and emissions, more transportation choices, greater transportation affordability, and more livable communities.

Land use changes can also be inexpensive compared to widening or building new roads, especially in urban contexts. In Washington, D.C., changes to land use — including allowing higher-density housing, letting homeowners rent out their ancillary dwelling units, and expanding the zoning boundary to enable downtown-adjacent neighborhoods to incorporate greater density and mixed uses — allowed the existing built environment to accommodate an additional 100,000 residents between 2005 and 2020. More than 50% of all trips became walk, bike or transit, while car ownership decreased significantly with nearly 80% of households now owning one or fewer cars.

As one opportunity, the Bipartisan Infrastructure Law includes $68.8 million for Pilot Program for Transit Oriented Development Planning grants so local communities can integrate land use and transportation planning. It also provides $75 billion in lending capacity under the Transportation Infrastructure Finance and Innovation Act (TIFIA) Program and expands the program’s authority to finance transit-oriented development projects, which include a mix of residential, commercial, entertainment, and office buildings centered around or located close to a transit station.

Moving Toward Clean Transportation in the US

Reducing emissions should be a key consideration in decisions about how to spend federal transportation funds if we are serious about staving off catastrophic global climate change. These decisions should happen throughout transportation programs — not just those with “climate” or “carbon” in their titles.

Fortunately, state and city policymakers have a number of tools at their disposal to make all transportation decisions low-carbon ones. Funding from the Bipartisan Infrastructure Law provides significant opportunity for states and cities to reimagine their transportation systems into ones that are safe, sustainable and accessible to all.

Note: This article is informed by the Climate Federalism Dialogue, which brings together states and cities to explore the best approaches to implementing climate-smart policy across various levels of government. The dialogue, which is facilitated by WRI and the Georgetown Climate Center, is exploring best practices for states and cities to advance zero-emission transportation through federal infrastructure investment.