Lesson In Bicycling Economics 101: Don't Forget To Include External Costs Like Pollution Exposure And Increased Mortality

I have been disturbed to live in a community where pollution is a serious health crisis [1], and I am surrounded by smart young people, yet nobody seems to care they are being poisoned. The worst demonstration of that is the movement to put a bicycle lane along side a major pollution and so health hazard - the I-90 freeway bridge elevated high into the polluted air of the Cuyahoga River Valley, in downtown Cleveland. Clearly, there are engineering and construction cost increases to include such a feature on a freeway bridge - costs society may afford - but what are the negative externalities associated with such a bridge feature, which would encourage individuals to exert themselves in immediate proximity - within a few feet - of a known carcinogen - vehicular emissions. This would also encourage people to spend increased time exerting themselves in an elevated point above other Cleveland pollution, like the toxins from Cleveland Thermal and Mittal, also in close proximity to the bridge. As there is proof that short term exposure to such pollution increases risk of serious short and long-term health consequences [2], it is certain such a bridge feature would increase healthcare costs, human suffering and mortality rates in this region, as it would harm the health and shorten the lives of those who use it. To the extent the feature encourages broad public use, the harm could be very significant - the equivalent of 100s of life-years lost, and more. What is the cost of genetic mutation among our young? External costs associated with putting a bike lane on the I-90 freeway bridge would far exceed the cost of the bridge itself.

In economics [3], an externality (or transaction spillover) is a cost or benefit, not transmitted through prices[1] [4], incurred by a party who did not agree to the action causing the cost or benefit. A benefit in this case is called a positive externality or external benefit, while a cost is called a negative externality or external cost.

In these cases in a competitive market, prices do not reflect the full costs or benefits of producing or consuming a product or service, producers and consumers may either not bear all of the costs or not reap all of the benefits of the economic activity, and too much or too little of the good will be produced or consumed in terms of overall costs and benefits to society. For example, manufacturing that causes air pollution [5] imposes costs on the whole society, while fire-proofing a home improves the fire safety [6] of neighbors.

If there exist external costs such as pollution [7], the good will be overproduced by a competitive market, as the producer does not take into account the external costs when producing the good. If there are external benefits, such as in areas of education [8] or public safety [9], too little of the good would be produced by private markets as producers and buyers do not take into account the external benefits to others. Here, overall cost and benefit to society is defined as the sum of the economic benefits and costs for all parties involved.[2] [10][3] [11]