Other True Costs of Driving
“True cost” examines other, less obvious cost from driving, and ways to restructure how those costs are paid for. Highlighting less obvious costs and linking them to each mile driven helps Oregonians understand how choosing to drive less (or not at all) can save them money, improve their health, and reduce greenhouse gas emissions.
Pay as you drive insurance
Pay as you drive insurance programs charge insured drivers based on the miles they drive, instead of paying an annual insurance premium. If you drive less your rates are lower, because you have a reduced chance of crashes or injuries. The upshot of people driving less to save on insurance is less greenhouse gas emissions.
Oregon state government can persuade insurance companies to adopt these kinds of programs through tax incentives, or mandate them with the help of legislative action.
Social costs of driving
Driving has a social cost on all people in Oregon. Emissions from a vehicle’s tailpipe pollute the air and can harm personal and community health.
The cost of air pollution can include higher health care costs for individuals and a lower quality of life for communities. In some disadvantaged communities, the cost is higher, relative to other communities.
These kinds of costs are harder to pay for than environmental ones, but state agencies can still reduce their harm and frequency through pricing programs that encourage travel with lower social costs. This approach is called “user pays true cost” and ensures that activities that create pollution or cause congestion have more transparent costs because of their impacts to other residents.
An example of “user pays true cost” is congestion pricing; people pay more to travel during high demand times. Another example is parking fees; people pay for the space which could have been used for other purposes.
Insurance companies will continue to expand pay as you drive programs in Oregon through 2050.
As more insurance companies offer pay as you drive insurance programs, state agencies and/or private providers will help educate the public, and consider state laws to expand program participation.
Oregon state agencies will educate shipping companies and consumers on the true cost of getting their goods to market and homes, including emissions impact of delivery methods and timing.
Other true costs of driving: emissions reduction vision
How Oregon is doing
Access to pay as you drive insurance was enshrined in Oregon law several years ago. Today, about 1% of insured drivers are enrolled in pay as you drive programs. Two auto insurance carriers in Oregon currently offer the program.
How Oregon can improve
Educating the public about the benefits of pay as you drive insurance programs is key to expanding their use. State government can also work with insurance providers to convince more of them to offer pay as you drive programs in Oregon. In theory, pay as you drive insurance programs could be coupled with road user fee programs, which would make the experience easier for Oregon’s drivers.
Another path would be for the state legislature to enact pricing programs that account for the environmental and economic costs of driving. These programs could price passenger vehicles based on weight or size; vehicle efficiency (miles per gallon); or other factors.
The basic idea is vehicles that are smaller, lighter and more efficient would pay less. Not only could these programs generate revenue, but they would provide incentives for drivers to change their habits and choose safer, lower-emission modes of travel.
Improving how revenue from pricing is used
Oregon law governs how state agencies can use revenue from pricing programs, and those laws restrict revenue from road user fees and congestion pricing to vehicle-related projects.
Vehicle-related projects include sidewalks and bike lanes, transit-only lanes, traffic signals, turn lanes and more within the roadway right-of-way. Some projects aren’t eligible however — like funding transit services and off-road paths — due to restrictions in Oregon law. Thus, transportation funding must include a variety of sources to fund projects, with special attention to cover projects ineligible for traditional roadway funds.
In 2022, ODOT amended the Oregon Highway Plan — which governs how toll revenue can be spent —to expand toll revenue usage to a more diverse set of projects.
As of 2022, DEQ is establishing rules for Community Climate Investments funded from their Climate Protection Program. The investments can support transportation and other projects that lower emissions, and focus on broad community input, especially from traditionally underrepresented groups.