#CycleToWorkUAE: Building wealth through health

Develop a culture of cycling, experts say, and you will gain a healthier, happier and more productive society. That’s a smart move in the UAE, where the costs of lifestyle diseases pose a major challenge for the country’s health system.

The ADCB Bikeshare scheme was launched on Yas Island last month. Above, above tourists from Italy cycle around the island. Mona Al Marzooqi / The National

Major healthcare savings, improved road safety, cleaner air and a healthier pocketbook can result by swapping the Bugatti for the bicycle.

Without doubt, the biggest economic benefit of cycling is improved public health.

With the Health Authority Abu Dhabi (HAAD), PwC and Alpen Capital all naming the increased incidence of lifestyle diseases – diabetes, cardiovascular diseases and obesity-related conditions as the top contributor to rising health costs in the UAE – it's clear that improving the country's health is the largest positive benefit cycling brings. Almost a fifth of the UAE's population has diabetes, according to the International Diabetes Association – the 16th highest incidence of the disease worldwide.

Daman, the national insurance company, estimates that diabetes will cost the UAE Dh10 billion per year by 2020 – and cardiovascular diseases were responsible for more than a third of the deaths in Abu Dhabi in 2013, the most recent year for which data are available, according to HAAD.

In the United Kingdom, where levels of obesity and diabetes are equally high, costs associated with these diseases consume 20 per cent of the national healthcare budget.

"Hopping on a bicycle can save your life – if a bicycle and decent streets to ride on are available to you," writes Elly Blue, the author of Bikeonomics: How Bicycling Can Save the Economy.

Two studies in public health journals, cited by Ms Blue, show that each dollar spent on cycling infrastructure in US cities saved more than four times as much in reduced healthcare costs.

After London introduced a public bike rental scheme, medical researchers found that increased physical activity reduced heart disease among men and depression among women.

A similar intiative was launched in Abu Dhabi last month on Yas Island. You might think that an increase in health benefits from cycling would be counterbalanced by more road traffic accidents.

Road accidents are a major killer in the UAE, accounting for 12.2 per cent of the deaths in Abu Dhabi in 2013, according to HAAD. That’s only slightly less than deaths from cancer, which caused 12.9 per cent of deaths in the emirate.

But the evidence suggests that more cyclists faced fewer crashes, not more (see graph). This is known as the “safety in numbers” hypothesis.

One offered explanation is that the increased visibility of cyclists changes how drivers drive. When cyclists are a common sight, drivers take greater care.

Whatever the reason, the data does not suggest that having more cyclists on the roads leads to an increase in traffic accidents. A paper from the municipal government of the City of Copenhagen, where more than a third of the population cycles daily, attempted to measure the positive impact of cycling on the city and its environs.

This involves adding together the effects on road uses – shorter journey times, improved health, chance of accidents – and the broader social impacts – effect on road safety, air and noise pollution, congestion, and road deterioration.

Economists call social impacts ‘externalities’. Externalities can be negative: harms inflicted on bystanders such as air and noise pollution or road accidents, and as well as positive: for instance, the social benefits of a healthier population, and improved life expectancy.

Cycling in Copenhagen costs society and the individual €0.08 per kilometre, compared to €2.15 per kilometre to drive, and €3.9 per kilometer to take public transport.

If you look at the social impact, cycling actually saves the city €0.5 per kilometre cycled, mainly due to the reduced risk of lifestyle diseases.

This means that investments in cycling infrastructure can pay for themselves very quickly, especially given that they’re often cheaper to begin with.

One Copenhagen road intersection, the Gyldenlovesgade, was identified as the site of more road accidents than any other. A project to redesign the road took place in 2006 at a cost of about €24 million.

The redesign reduced the number of accidents by 3 per year – equivalent, Copenhagen’s local government estimates, to a saving of €8m each year in reduced health expenditures and fewer days taken off work.

That means it took just three years for the project to break-even. At 33 per cent per year, that is enviable rate of return on any capital project.

Similarly, the construction of 1 kilometre of cycle lane in Copenhagen has a net present value of €0.6m over the course of 20 years, but costs only €0.4m to build.

A national love of driving is not just bad for public health; it’s also much more expensive.

Infrastructure spending on roads and government regulations on parking, represent, in economic terms, large social transfers from non-drivers to drivers.

Even in countries where road taxes are high – the US, the UK and Denmark – user fees are not high enough to cover the social costs of motoring.

In the UAE, where road taxes are virtually non-existent and fuel prices are subsidised, the government’s role in encouraging driving is even clearer. In an era of low oil prices, these generous policies may start to look less attractive.

Elly Blue believes that the benefits of expanding road infrastructure are overstated.

She argues that highway construction projects are an example of what economists call “induced demand” – where an increase in the supply of a good also increases the demand for it. In short: building more roads leads to more cars on the road.

Todd Litman, a researcher at the Victoria Transport Policy institute, explains the concept as follows: “Congestion reaches a point at which it constrains further growth in peak-period trips,” he says. “If road capacity increases, the number of peak-period trips also increases until congestion again limits further traffic growth.”

So Dubai’s peak-time congestion will not necessarily be eased by building more roads.

The European Investment Bank invests in road projects across the European Union. When judging the benefits of new roads, it places significant emphasis on time-savings and reductions in congestion. The problem is that if the “induced demand” hypothesis is correct, new road projects could have significantly fewer benefits than the EIB estimates. Absent also from the EIB’s calculations is the consideration of the public health effects of increased road use.

The impact of any individual road project on public health is likely to be virtually zero. But aggregate spending on roads, and the increase in driving that results, is likely to contribute to poorer health.

When these kinds of considerations are factored in, the case for increased road-building becomes much more ambiguous – and the case for building infrastructure for cyclists instead of cars becomes stronger.

This is exactly what the City of Copenhagen found, when it compared the rate of return on cycling projects to the rate of return on road and rail projects.

Money spent making the city safe for cyclists actually went further than money spent on new roads. There is one more economic factor we should consider: happiness. Ask any regular cyclist, and they’ll tell you that cycling is fun. Since economics is the study of human welfare, this is not an irrelevant consideration. As John F Kennedy once said, exaggerating his case somewhat, “nothing compares to the simple pleasure of a bike ride”. He owned more than forty classic cars.

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