Strategic Issues Facing Transportation, Volume 4: Sustainability as an Organizing Principle for Transportation Agencies (2014)

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105 Transportation agencies are considering strategies to prepare for a future in which transportation could best support a sustainable TBL policy system. Those strategies depend on understanding the challenges and opportunities to be found in the envisioned TBL policy system and the gaps— where do agencies need to go from here? This chapter recaps the research on where transportation agencies are now in relation to a TBL policy system; the key issues for evolution to a new TBL policy system; followed by what agencies can reasonably do to assess, prepare for, and participate effectively in that evolution. This research, along with other work (including the other reports in the NCHRP Report 750 series and NCHRP Report 708: A Guidebook for Sustainability Performance Measurement for Transportation Agencies), has assembled and continues to assemble a considerable body of information and opinion to support practical deliberation on the strategies needed. In referring to “transportation agencies” in this discussion, the report addresses a large and variable audience of government agencies at all levels in the transportation community; therefore, not all of the research results will necessarily interest or resonate with the entire audience in the same way. However, it is clear that a viable TBL policy system will require close collaboration and strategic consensus at all levels of government as well as with the private and institutional sectors. Figure 14 summarizes the policy system evolution spectrum. The research presented in Chapter 2 and Appendix D of this report suggests that many state transportation agencies have evolved from a Level 1 policy system (Compliant Transportation) to a Level 2 policy system (Green Transportation) over the past decade. The research also suggests that overall, urban local agencies are slightly ahead on this scale and that federal agencies are behind in terms of current capabilities and initiatives. It is logical that a new transportation policy system related to the environment, with economic and social implications, would emerge and evolve at the local level and would build momentum from there. At the local level, consensus can be developed around a narrower set of specific issues, and land use decisions usually are made or strongly influenced locally. This local influence is not necessarily operative for the development of other policy systems built around other concerns or needs. For example, consider the speed and effect of the policy system built around transportation security following the events of 9/11. Figure 15 is a comparative illustration of the top-down and bottom-up policy system development processes. The top-down and bottom-up policy development processes are not mutually exclusive. As (and if) momentum builds for sustainable TBL initiatives and as larger investment decisions are needed, a top-down process may play a stronger role. The following sections present for consideration strategies for moving forward, first at a general level, followed by more function-specific approaches. C H A P T E R 7 Near-Term Tools and Strategies to Consider

106 Sustainability as an Organizing Principle for Transportation Agencies 7.1 General Strategies Decisions about investing an agency’s focus, funds, and political capital are difficult to make toward what could be a distant objective without careful and continuous assessment of the evolv- ing policy system around sustainable TBL, both regional and national. Although research shows that significant activity and momentum have been building toward green transportation and context-sensitive development, there is no experience with sustainable TBL to conclusively show that it is practicable. For evaluation of program and strategic decisions to invest in sustainability initiatives, decisionmakers need barometers or indicators to assess the evolution of TBL policy systems, the state of the practice in the industry, and a sense of the demand for the initiative. These will assist in supporting decisions on priorities, level of commitment, and potential return on investment (ROI). The general strategies identified in this section would focus agencies on (1) detecting and assessing the evolution of a sustainable society policy system and (2) assessment and readiness of agencies and the transportation community to support a future TBL policy system. Some general strategy development actions for agency consideration in the near term (in addition to tracking relevant legislation and rulemaking) include the following: • Establish or participate in a national dialogue on evolution of a TBL policy system, including all levels of government and the private sector Focus of Sustainability Initiatives A b il it y to S u p p or t a S u st ai n ab le S oc ie ty Compliance/Short-term Focus Sustainability/Long-term Focus Fo cu s on H ig h w ay T ra n sp or ta ti on O n ly Fo cu s on S oc ie ta l S u st ai n ab il it y LEVEL 0 – SAFE MOBILITY • Supports societal mobility & safety • Favors government ownership & control of the transportation infrastructure • Transportation agency: infrastructure owner-manager and regulator LEVEL 1 - COMPLIANT TRANSPORTATION • Supports societal mobility & safety • Compliance with environmental, economic, and social legislative requirements • Transportation agency: infrastructure owner-manager & and regulator • Top-down planning LEVEL 2 - GREEN TRANSPORTATION • Supports societal mobility, safety, environmental, economic, and social needs -- Emphasizes Environment • Transportation agency: infrastructure owner-manager and regulator LEVEL 3 - SUSTAINABLE TRANSPORTATION • Supports sustainable transportation • Risk-sharing between public and private sector • Infrastructure integrator (some owner-operator & some private) • Regulator LEVEL 4 - TBL SUSTAINABILITY • Supports societal sustainability • Broad agency decision-making partnerships • Risk-sharing between public and private sector • Infrastructure Integrator (some owner, some owner-operator, and some private) • Regulator and steward partner Figure 14. Policy system spectrum related to sustainability capability and initiatives.

Near-Term Tools and Strategies to Consider 107 Demonstrate ROI, show benefits Increase support, build coalions in favor of change New legislaon or execuve orders State leaders and key stakeholders iniave sustainable iniaves • Public • Stakeholders • Major interest groups • Economic interests DOT changes policies, programs, and process DOT changes culture to support sustainability Program Implemented Program produces benefits Increase support and coalions in favor of change Top-Down Execuve-Led Approach to Building Sustainability Bo om-Up Locality-Led Approach to Building Sustainability Local transportaon challenges create catalyst for change City government leaders develop sustainability program in response to local challenges Demonstrate ROI, show benefits Increase support, build coalions in favor of change • Public • Stakeholders • Major interest groups • Economic interests Local DOT changes policies, programs, and process Program Implemented Program produces benefits Other localies adopt innovaons Success builds support State leaders and key stakeholders iniave sustainable iniaves New legislaon or execuve orders Figure 15. Policy system development—top down, bottom up.

108 Sustainability as an Organizing Principle for Transportation Agencies • Monitor and assess the development and spread of sustainability rating systems and measures, particularly those sponsored by independent rating bodies • Monitor and assess the development and adoption of measurement and certification stan- dards, particularly those that deal with two or more elements of the TBL • Monitor and assess the deployment of sustainability tools and methods, particularly those adopted by several peer agencies, focusing on those that involve two or more elements of the TBL • Conduct periodic discussions with stakeholders and agency constituents to take stock of the outlook for sustainable TBL (e.g., timing of such dialogue could be triggered by significant events, rulemaking, or significant trend changes in the factors monitored) Voluntary adoption and use of measurement and rating standards by agencies and the private sector is a strong indicator of their utility and credibility within the community or market, which is why they are the focus of several of the previously listed monitoring activities. In addition to the aforementioned tools, there are tools and methods that agencies can adapt, develop, and use broadly to support high-level agency functions: • Self-assessment tools to continuously gauge the “TBL maturity” and capability of the agency to prepare for the next phase of development of the sustainability policy system, which will help focus on near-term actions to improve or strengthen focus, if needed (An example of such a tool is included in Appendix F.) • Sustainability-related ROI assessment tools, which could support communications and decisionmaking for many agency functions • Surveys and scans to follow up on previous sustainability initiatives and decisions to confirm or calibrate logic and assumptions Transportation agencies could implement such actions at relatively low expense. They are easily reversible, “no- or low-regrets” actions that produce strategic information and insights into future demands and benefits. The following section outlines near-term strategies for considerations related to agency functions and a framework for the research. Where agency initiatives are specifically cited in this report, they are intended to provide examples and information on lessons learned. And since many of those initiatives have developed in recent years, they are not necessarily proven as the “right” approaches for wide acceptance. 7.2 Development of Consensus on Future Vision, Goals, Objectives, and Needs The general process for this function is currently well established for most state agencies. Several aspects of this process present challenges in dealing with sustainability, particularly when moving out of the discussion on transportation and environment and moving into the discussion of transportation and TBL. The research team suggests that TBL will complicate the following areas: • Achieving agreement from stakeholders and partners on a definition of sustainability, a definition that is built on TBL and also accounts for state and regional needs and priorities • Mapping agency goals to the proposed definition of sustainability • Developing associated measurable objectives to track agencies’ progress in addressing needs and achieving progress in meeting goals • Developing performance measures tied to the proposed objectives and for each focus area These processes likely will become routine when a TBL policy system has developed and matured, when appropriate ROI models and performance measures will presumably exist. An ROI model that can function on a macro level (pre-project planning and selection) could be

Near-Term Tools and Strategies to Consider 109 useful in the near term to test and incorporate public expectations for TBL outcomes. This challenge is magnified by the need to address the needs of multiple civil agencies as the TBL policy system evolves. Given that future TBL-related policy systems likely will require much more public, interagency, and intersector engagement than previous decades, agencies may find it useful to test the various choice-facilitation models that already have been developed. These models are interactive and can encourage multiple stakeholders to engage in decisionmaking by analyzing responses to many issues that involve choices, producing weightings, rankings, and other data to facilitate negotiation and consensus. Summary—Consensus on Needs and Goals • Reach consensus with stakeholders and partners on a definition of sustainability that is built on TBL and accounts for the needs and priorities of the state and region. • Map agency goals to the proposed definition on sustainability. • Develop associated measurable objectives to track agencies’ progress in addressing needs and achieving progress in meeting goals. • Develop performance measures tied to the proposed objectives and each focus area. 7.3 Planning and Programming Transportation agencies can select from numerous tools to improve sustainability planning and programming. For example, California has developed the Regional Blueprint Planning Program [see Applied Development Economics, Inc. and Collaborative Economics, Inc. (2010)]. The California legislature established this process in 2005 as a 2-year program and has since expanded it. Regional blueprints are collaborative planning processes that engage residents of a region in articulating a vision for the long-term future of their region. The regional vision is developed from residents’ values and priorities and informed by advanced geographical information system modeling and visualization tools that demonstrate the potential impacts of growth and planning decisions. The process leads to the development of alternative growth scenarios for the region and, through a public process, to selection of a preferred growth scenario that can then guide regional and local land use and transportation decisions for a future that is sustainable while also meeting residents’ needs and providing a high quality of life for all. The California DOT (Caltrans) publishes regular reports on the success and progress of the plan. For example, the 2010 California Regional Progress Report presents a framework for measuring sustainability based on 20 integrated, place-based, quality-of-life regional indicators. Regional- scale issues, such as air quality, housing affordability, vehicle miles traveled, and electricity use, form the basis for assessing the combined impact of regional outcomes on the state’s sustainability. Data needs are highlighted for important regional-scale indicators that currently lack wide- spread or accurate measurements, including tracking new development, combined housing and transportation costs, and equity. The report calls for dialogue among state, regional, and local governments to share strategies, address disparities, define sustainability, and improve sustainability measurement. The planning and programming function is particularly in need of improved ROI tools and approaches for estimating sustainability. These tools can be used to select specific projects and to communicate the business case for sustainability to stakeholders. Many such tools are currently being used in the United States and other countries. There also are a number of firms that have developed these tools and offer them as part of their services (e.g., HDR, PricewaterhouseCooper). For example, HDR has developed a sustainability ROI (SROI) tool. However, the tool is still a

110 Sustainability as an Organizing Principle for Transportation Agencies limited version of an SROI model. Figure 16 provides an overview of the structure of HDR’s SROI tool. Several points are apparent from this model. First, the tool is not quite a stand-alone tool. Although at the core of the approach is a Microsoft® Excel model, each application of the approach requires a separate analysis and adaptation of the tool to the specific situation. Second, the tool is not a transportation-only tool; it has been developed from a variety of infrastructure elements. The very generality of this approach means that the tool is somewhat open ended and flexible to capture numerous potential variables. The tool can be useful to transportation agencies if it is adapted for specific transportation issues of concern. One such example is for the City of Boston’s estimates of ROI related to the American Recovery and Reinvestment Act. As can be seen in Figure 17, the system can be adapted for transportation, but needs to be highly customized. In the example, the variables explored are simple and transit related. Another ROI-related tool is the Parsons Brinckerhoff Regional Impact Scenario Model (PRISM), which is a proprietary transportation economic impact model similar to REMI and other transportation input/output models. PRISM uses documented, established relationships between economic and travel-related factors to generate estimates of regional economic impact. PRISM considers how changes in accessibility—measured as changes in travel time and other transport costs—affect cost efficiency and production (output) for existing industries in a region. PRISM also captures potential improvements in worker productivity and overall labor market activity resulting from personal travel time savings. In addition, PRISM estimates how these initial increases in industry activity and income cycle through the economy in the form of more household and business spending, producing total impacts that can be several times greater than the initial cost savings. Together, these analyses compose the Regional Economic Impact module of PRISM. This module’s focus is on the long-term, permanent changes to a regional economy, as a region’s pro- ducers and workers become more cost efficient and productive due to better transportation access, and as expanded business sales and personal income recycle throughout the area’s economy. Key economic impact measures estimated by PRISM include employment and wage growth, and increases in gross regional (and state) product. Gross regional product (GRP) is equivalent, on a smaller scale, to GDP. It can be viewed as the local economy’s GDP—however that local geography may be defined. Source: HDR Figure 16. Overview of structure of HDR’s SROI tool.

Near-Term Tools and Strategies to Consider 111 PRISM actually consists of several interrelated but separate modules. In addition to the Regional Economic Impact module, it includes a module for conducting an economic benefit-to-cost analysis; a module for estimating impacts on regional employment from a project’s construction and maintenance expenditures (in effect, a short-term stimulus impact model); and an SROI module, which considers a range of long-term environmental and social benefits, with a focus on sustainable transportation and development. The SROI module is intended to help users focus and structure a public dialogue to achieve an enriched understanding of what is really at stake in the consideration of projects, plans, policies, and programs. Specifically, by using information typically contained in environmental analyses, the module uses dollar equivalents and econometric techniques to bring social, economic, and environmental factors onto a level playing field with traditional project costs. Social and environmental factors include carbon dioxide emissions, air quality impacts, water resources, livability, and access to transportation. Techniques used to estimate these impacts include consumer (producer) surplus (i.e., willingness to pay versus price), defensive expenditures (i.e., cost to prevent adverse effects), hedonic pricing (i.e., surrogate valuation such as changes to real estate markets), travel cost (i.e., willingness to pay to travel to location), contingent valuation (i.e., surveys, questionnaires, and interviews), and choice experiments. Some tools do address these broader effects, such as the New Zealand Transport Agency’s Economic Evaluation Manual (Volume 2; 2010). Towns and cities throughout New Zealand use this tool to estimate the benefits of sustainable transportation projects. The manual breaks down sustainability benefits into a variety of environmental, economic, and social benefits. Benefits Source: HDR Figure 17. Sample HDR SROI.

112 Sustainability as an Organizing Principle for Transportation Agencies are estimated based on the mode choice changes, such as reduced congestion, reduced idling, and other changes that are intended to occur as a result of sustainability. Environmental benefits are associated with GHGs, criteria air pollutants, water, and other environmental factors. Social benefits are associated with reduced injuries and accidents; improved health (from encourag- ing mode use shift to walking and biking); and economic benefits, including benefits associated with the value of time and the value of freight delays. The methodology is supported by several default values that localities use to estimate the monetized benefit of factors such as reducing congestion. The methodology also includes the facility-based measures discussed previously (e.g., reduction in energy use resulting from facility improvements) and is packaged as a series of spreadsheets for easy analysis. Tools used in the United States address many similar indicators. For example, Caltrans has maintained a simple ROI spreadsheet model for more than a decade that estimates the costs and benefits of highway projects. This simple tool guides users through the development of cost estimates and also estimates project benefits in terms of time saved from reducing congestion, reduction in accidents (monetized as reduced morbidity and mortality and reduced cost of responding to accidents), and environmental benefits (e.g., GHG reductions) (see Caltrans, 2007). This tool, known as Cal-B/C, has been in use since the early 2000s. The Economic Analysis Branch of Caltrans routinely conducts life-cycle benefit–cost analysis for proposed state highway and public transit projects. Such analysis is performed using Cal-B/C. Cal-B/C can be used to analyze many types of construction and operational improvement proj- ects, as well as intelligent transportation system (ITS) projects. Transit projects may include new or improved bus services and infrastructure support projects as well as light rail and heavy rail projects. The application is structured to analyze several types of transportation improvement projects in a corridor where there already exists a highway facility or a transit service (this constitutes the base case in the analysis). Benefits are calculated for existing and (optionally) for induced traffic, as well as for any traffic diverted from a parallel highway or transit service. Peak and off-peak benefits are estimated separately. Highway impacts are provided for high-occupancy vehicle (HOV) and non-HOV passenger vehicles and trucks. Highway time savings are based on a speed–congestion relationship. Minimal input data is required because the spreadsheet is populated with many default values suited to California urban and rural applications. Each analysis is based on annual transit person-trips and the representative annual average daily traffic for a highway facility. Values are input for the base case and the proposed improvement alternative. Inputs are factored to peak and off-peak volumes and (for highways) truck volumes. As needed, free-flow speeds, before–after transit trip times, transit vehicle miles and before–after accident data are entered, along with fixed costs and annual costs, on a year-by-year basis. Tools of this kind could be adapted to support or feed SROI tools, and the performance benefit computations could be enhanced and/or monetized to feed into similar benefit–cost models for all three bottom lines. Other tools also support planning (e.g., HDR’s SROI tool) and programming (e.g., Cal-B/C). Better-known examples are summarized in Table 36. Summary—Planning and Programming • Expand existing modeling and planning tools to account for multimodal options and impacts, as well as regional quality of life. • Coordinate data collection activities with engaged partners, including state and local agencies, as well as system operators and the private sector. • Connect the prioritization process to proposed TBL goals, measures, and objectives, such as ROI estimators, the Economic Assessment of Sustainability Policies of Transport (ESCOT) model (Schade, 2005), and the Assessment of Transportation Strategies (ASTRA) model (Schade et al., 2005).

Near-Term Tools and Strategies to Consider 113 Methods and Tools Developer/Owner Description and Use GreenLITES New York State DOT The expanded program includes rating systems, spreadsheets, and other metrics to assess projects, plans, O&M programs, and regional programs. Smart Mobility Framework (SMF) Caltrans The SMF was prepared in partnership with the U.S. EPA and various California state government offices to address both long range challenges and short term pragmatic actions to implement multimodal and sustainable transportation strategies in California. The SMF planning tool helps guide and assess how well plans, programs, and projects meet a definition of smart mobility. Smart Mobility 2010 provides tools and techniques that improve transportation by using the SMF principles to achieve sustainable outcomes. Least Cost Planning Oregon DOT Model for use as a decisionmaking tool in the development of plans and projects at both the state and regional levels. Livability, safety, equity, economic vitality, and environmental stewardship will be evaluated side by side with traditional considerations such as capital costs. Model of Sustainability and Integrated Corridors Maryland State Highway Administration The tool employs a spreadsheet with six categories of sustainability indicators: mobility, safety, socioeconomic impact, natural resources, energy and emissions, and cost. Includes more than 30 sustainability performance measures. Project Assessment Tool State of Rhode Island The tool includes the following five categories: (1) transportation choice and accessibility, (2) housing choice and affordability, (3) economic development, (4) support of existing communities and designated growth centers, and (5) community character and collaboration. Most categories contain five to six questions. Weighting is available but not required. Sustainability Enhancement Tool Texas DOT This spreadsheet-based calculator applies performance measures for sustainability at the highway corridor level; it includes 12 performance measures. Infrastructure Voluntary Evaluation Sustainability Tool (INVEST) U.S. DOT, FHWA INVEST was developed by the FHWA as a practical, web- based collection of voluntary best practices, called “criteria,” designed to help transportation agencies integrate sustainability into their programs (policies, processes, procedures, and practices) and projects. Composite Sustainability Index Atlanta, Georgia Considers multidimensional conflicting criteria in the transportation planning process and identifies the most sustainable (or least unsustainable) plan for predetermined objectives. Sustainable Transportation Access Rating System (STARS) North American Sustainable Transportation Council (a collaboration of public- and private-sector professionals from Oregon, Washington, California, and Nevada) This framework applies 29 credits organized into seven categories: integrated process, access, climate and energy, ecological function, cost-effectiveness, analysis, and innovation. Sustainable Corridor Rating System University of Delaware, Newark Methodology for rating systems applied to urban corridors. Table 36. Assessment and rating tools—main focus on planning and programming. (continued on next page)

114 Sustainability as an Organizing Principle for Transportation Agencies 7.4 Budgeting and Resource Allocation Looking forward, budgeting and resource allocation functions may need to undergo changes to accommodate new business models that require greater flexibility to enable transfers and shifts of budgets across agency organizational units and among agencies as decisions and risks are shared to a greater extent than today. However, such changes likely will occur only after new business models are developed; no specific changes in typical agency budgeting processes have been identified as needed for the near term. Total cost accounting (TCA) is needed for TBL analyses to capture the full cost and range of all impacts. Understanding the full scope of costs and attendant benefits would enable decisionmakers to fully assess the TBL implications of policy and investment decisions. TCA is not likely to serve as a business accounting system, as it would then have to follow rules so prescriptive and consistently applied, that it would not suit its basic purpose—which is to support decisionmaking and priority choices, many of which will involve unique assumptions. TCA is an estimating tool that is intended to account for the most complete possible picture of the costs and benefits of service, product, or system process decisions. TCA operates in economic terms and can incorporate such considerations as life-cycle effects, opportunity costs, and time value of money (or equivalent units of measure). Research indicates that TCA estimating principles in combination with basic economic theory can be applied to nonmonetary value measures such as environmental impact to assess long-term implications of actions on environmental conditions. TCA can and likely will play a significant part in TBL decisionmaking on major initiatives and programs. To the extent it does, its influence will permeate implementing organizations just like project or program cost–benefit assumptions tend to set the tone and expectations for implementation today. For budgeting and resource allocation functions, the use of TCA would clarify and facilitate translation of policy objectives and outcome expectations along with the funds to be allocated [see also Gibran and Sekwat (2009)]. TCA, or as it is sometimes also called (when applied to sustainability issues) “environmental full cost accounting” (EFCA), is an accounting approach that attempts to estimate the full direct and indirect costs of a proposed project or investment throughout the life cycle. At its most ambitious, TCA attempts to estimate all the costs associated with the TBL arising from the investment. The International Organization for Standardization (ISO) has several accredited Methods and Tools Developer/Owner Description and Use Evaluative and Logical Approach to Sustainable Transport Indicator Compilation U.K. government This framework is for identifying and selecting a small subset of sustainable transport indicators. Green Guide for Roads Transportation Association of Canada The initial framework includes 13 areas where sustainability practices can be applied, with a description of requirements and associated best practices or strategies. It applies to all types of roads in urban and rural settings and includes sustainability considerations such as improved compatibility and livability, universal accessibility, modal equity, conservation of resources, affordability on a full life-cycle basis, and environmental protection. Table 36. (Continued).

Near-Term Tools and Strategies to Consider 115 standards useful in EFCA or TCA including for greenhouse gases, the ISO 26000 series for corporate social responsibility, and the ISO 19011 standard for audits. Specifically, TCA differs from traditional accounting and cost approaches by: • Accounting for costs rather than outlays: Traditional costing simply looks at the outlay or initial expenditure on each budget item. TCA estimates the full cost of the purchase includ- ing its impact on other operations or parts of the project and the lifetime cost of the purchase decision. • Accounting for hidden costs and externalities: All purchases of goods and services have externalities and hidden costs. For example, the purchase of a particular vehicle for a transit fleet comes with a set of externalities concerning its production, delivery, and operations and the costs and TBL impact of maintenance operations. TCA attempts to account for all of these hidden costs and/or externalities. • Accounting for overhead and indirect costs: TCA accounts for and attempt to allocate all overhead and indirect costs, including those that are shared with other public agencies. Over- head and indirect costs might include legal services, administrative support, data processing, billing, and purchasing. Environmental costs include the full range of costs throughout the life cycle of a product or delivered service. • Accounting for past and future outlays: Past and future cash outlays often do not appear on annual budgets under cash accounting systems. Past costs are initial investments necessary to implement services such as the acquisition of vehicles, equipment, or facilities. Future (or back-end) outlays are costs incurred to complete operations such as facility closure and post-closure care, equipment retirement, and post-employment health and retirement benefits. TCA attempts to capture all these costs. The TBL policy system also may affect budgeting and resource allocation by creating the need to make longer-term financial and risk-taking commitments in partnership with other agencies. Both budgeting and resource allocation must be in step with regular funding authorization cycles today. Although those cycles may or may not change in the future, the budget accounting and allocation systems will need rules and processes that allow for recognition and accounting of budget surpluses and deficits that can reasonably be contained and controlled, because fund- ing will fluctuate. Agencies can benefit quickly from TCA by virtue of improved cost tradeoff information, but the need for longer-term budgeting and management of surpluses and deficits, although likely, is not as urgent. TCA also will improve agency practice by applying one of the key methodologies needed to support sustainability—life-cycle cost accounting (LCCA)—to better estimate the long-term cost of alternative investments. LCCA is a cost-estimating technique for assisting practitioners in determining the costs of alternative investment options for a specific project or projects. LCCA is commonly applied to examine new projects and to assess preservation, rehabilitation, or replacement options for existing transportation assets. LCCA includes initial cost but considers all agency costs and can be expanded to account for user costs throughout the life cycle of alter- native projects. LCCA is supported by readily available software and can be adapted to include monetized estimates of “cost” for impacts that are otherwise qualitative. In general applications, LCCA typically uses discounting to convert anticipated future costs to present value for alternatives analyses. Note that there is a debate over logic and policy issues with discounting. When public funds are used, it is difficult to assess the real opportunity cost incurred (or the discount rate needed). The FHWA has provided substantial information on LCCA for more than 10 years [see FHWA (2013)]. For example, in 1998, the FHWA produced Demonstration Project 115, “Life-Cycle Cost Analysis in Pavement Design,” which developed a technical bulletin, an LCCA instructional

116 Sustainability as an Organizing Principle for Transportation Agencies workshop, and a proof of concept for an LCCA software tool. FHWA Resource Center personnel have presented this workshop to more than 40 states. The FHWA’s sustainability guidebook provides numerous examples of cases where states have successfully used LCCA as part of their sustainability programs (Amekudzi et al., 2011). For example, the Illinois DOT’s LCCA process evaluates alternatives based on the present worth of future capital, maintenance, and operations costs, which enables the agency to compare alter- natives that may incur costs at different times during their life cycles. It also incorporates the interest rate, which is an important consideration in determining discount rates. LCCA helps identify the best value for investment expenditures (i.e., the lowest long-term cost that satisfies the performance objective). The FHWA’s guidebook on sustainability recommends adapting the LCCA methodology to aid in assessing sustainability. Using this approach, the costs of a proposed project are expanded to consider all of the environmental, economic, and social impacts. The decisionmaker can then see the full cost profile of all alternatives and select the alternative with the lowest overall social, economic, and environmental cost. The LCCA methodology, combined with the ROI estimation techniques identified previously, would form a powerful tool for long-term sustainability analysis. Summary—Budgeting and Resource Allocation • Increase flexibility in budgeting, which may be needed to support risk sharing within and between agencies over multiple budget cycles. Agencies should consider long-term budget accounting and management and control of reserve accounts. • Consider the institution of TCA. • Consider integrating LCCA tools in the planning and budgeting processes. 7.5 Rulemaking and Regulation Rulemaking by its nature is generally a prescriptive and arduous process. After authorizing legislation is passed, designated agencies are responsible for rulemaking to create regulations, standards for compliance, and regulatory processes. These are vetted with stakeholders through a structured public comment–resolution process. If the current policy system for transportation evolves toward sustainable TBL, it is inevitable that various forms of legislation will accompany or drive the transition, and the resulting rulemaking can be expected to be complex in terms of the agencies, sectors, scientific content, standards, and process issues that are involved. Throughout the rulemaking process, transportation agencies, other involved agencies, and the private sector will undoubtedly be concerned about their capabilities to comply and about their costs of performing the business of government and the business of commerce. As the debate over GHG regulation continues, a similar level of concern from the government and private sectors is apparent. But, despite the challenging scientific issues and the practical concerns over how this regulation can work, there is a widely held public opinion and fear that GHG is a major driver of climate change trends. It seems clear to many that action is needed to avert serious environmental problems. Partly as a result of this public dilemma, several major companies and agencies have been measuring and rating GHG output, carbon footprint, and related factors. This is an example of trying to stay ahead of regulation and preparing for legislation or rulemaking to occur. Under the TBL policy system, it is logical to expect a bias in favor of flexible regulations and voluntary compliance with accepted standards as an important component of successful

Near-Term Tools and Strategies to Consider 117 sustainable TBL programs. Without this flexibility, rulemaking can be expected to be an onerous task and the rules can be expected to be difficult to comply with. Returning to the GHG example, if voluntary efforts and market effects coalesce into widely accepted guidelines, practical standards of achievement and measures, and rating systems, rulemaking could support or adopt them in a practical form. Recommendations for agency consideration in this section closely follow the general strategies outlined in Section 7.1, which is to engage in developing methods, standards, and measures for TBL and to test those methods for practicality under the agency’s specific functional structure and operating environment. This process can include evaluating, testing, and possibly integrating various approaches already in use (e.g., Caltrans, HDR, and New Zealand Planning Support). Anticipating and preparing for TBL rulemaking likely will require a holistic approach and viewpoint that represents more than one agency’s operating regime. The strategy will need to include and encourage partnering with other agencies, public interests, and experts—the regional and local stakeholders and key actors in the TBL. Wide acceptance and adoption of standards and measures is also known to have led to a form of “self-regulation” for an industry sector if sound value propositions exist for doing so. Suggested near-term focus areas for this process include the following: • Common understanding of shared concerns, issues, and opportunities connected with TBL • Overall ROI for the participants in the collaborative effort (i.e., What is the benefit for each party and for all parties? What is the potential cost and risk of not acting?) • Monetize the impacts of potential regulatory requirements • Connect impacts to jobs, commerce, and state and local revenues • High-level TBL-related planning and decisionmaking concepts • TBL-related viewpoints, standards, and expectations • TBL-related measures • Measures of success and rating • TBL acceptance and adoption issues. Engaging the transportation community in this way would no doubt present many challenges and would require significant investment of participants’ time and resources as well as focus away from other, short-range priorities. However, the sustainable TBL policy system may not be too far off in the future in some regions. In many respects, the “strong” TBL policy system is already in evidence in a number of areas. The expanded Green Leadership in Transporta- tion and Environmental Sustainability (GreenLITES) and the Illinois—Livable and Sustainable Transportation (I-LAST™) examples (see Section 7.6) reflect some of the TBL dimensions and the kind of private–public-sector collaboration needed. Summary—Rulemaking and Regulation • Anticipate and prepare for new TBL-related rulemaking activities by, for example, initiating capture of data and measures likely to be required under new regulations. • Obtain a common understanding of the shared concerns, issues, and opportunities connected with TBL. • Determine overall ROI (the value proposition) for the participants in the collaborative effort (e.g., What is the benefit for each party and for all parties? What is the potential cost and risk of not acting?). • Monetize the impacts of potential regulatory requirements. • Connect impacts to jobs, commerce, and state/local revenues. • Develop high-level TBL-related planning and decisionmaking concepts. • Obtain TBL-related viewpoints, standards, and expectations.

118 Sustainability as an Organizing Principle for Transportation Agencies • Craft TBL-related measures. • Determine measures of success and rating. • Assess acceptance and adoption barriers and issues. 7.6 Service and Project Delivery Service and product delivery includes all functions and activities that are related to the provision of transportation services and products, including development, design, construction, operations, traffic management, maintenance, and preservation. One of the major issues stakeholders identified was the need for standards and approaches to identify sustainable options and to ensure that the selected materials or systems purchased meet sustainable requirements. There are several standards-based systems for transportation developments that transportation agencies could use in the near term. For example, in 2011, TRB published NCHRP Report 708, a comprehensive analysis of current sustainability rating and performance systems. The report provided state DOTs with a practical and easy-to-use approach to identifying and applying sustainability-related performance measures to transportation decisionmaking and provided a reference compendium of performance measures (Zietsman et al., 2011). In addition, numerous states, localities, and federal agencies have launched efforts to develop, catalogue, and assess sustainability rating systems. Table 37 shows several of these tools and approaches for assessing Table 37. Assessment and rating tools—main focus on project delivery. Methods and Tools Developer/Owner Description and Use Guide to Sustainable Transportation Performance Measures U.S. EPA Overview of recommended performance measures and a guide to sustainability decisionmaking. INVEST FHWA Web-based self-evaluation tool with three modules: project development, O&M, and system planning; assigns each practice a point value (weight) according to its relative impact on sustainability. GreenLITES New York State DOT The expanded program includes rating systems, spreadsheets, and other metrics to assess projects, plans, O&M programs, and regional programs. I-LAST Illinois DOT A checklist of potentially sustainable practices is followed by a description of the intent of each category in the checklist and the rationale and measures of effectiveness for each item. Lists of source materials and additional background resources for each item assist in understanding and applying the practices. CEEQUAL International U.K. government Institution of Civil Engineers This online assessment tool scores project performance on management and a range of environmental and social issues. Envision™ Institute for Sustainable Infrastructure (ISI; founded by the American Society of Civil Engineers, American Public Works Association, and American Council of Engineering Companies) Evaluates, grades, and gives recognition to the community, environmental, and economic benefits of infrastructure projects. Greenroads Greenroads Foundation Project based sustainability rating system; the performance metric awards points for more sustainable practices during the design and construction phases of roadway projects.

Near-Term Tools and Strategies to Consider 119 sustainability. Rating and performance measurement tools are rapidly being developed and new tools are being developed and modified all the time. Green Leadership in Transportation and Environmental Sustainability One of the most well-known systems is GreenLITES, a transportation certification program developed by the New York State DOT (NYSDOT). GreenLITES is intended to do the following: • Recognize and increase the awareness of the sustainable methods and practices NYSDOT already incorporates into its project designs and daily operations • Expand the use of these and other innovative alternatives that will contribute to improving transportation sustainability GreenLITES is a self-certification program that distinguishes transportation projects and operations based on the extent to which they incorporate sustainable choices. GreenLITES address all stages of transportation projects including planning, maintenance, and operations. Currently, it is primarily an internal management program for NYSDOT to measure its performance, recognize good practices, and identify where improvement is needed. It also provides the agency with a way to demonstrate to the public how it is advancing sustainable practices. NYSDOT project designs and operations are evaluated for sustainable practices, and—based on the total credits received—an appropriate certification level is assigned. The rating system recognizes varying certification levels, with the highest level going to designs and operational teams that clearly advance the state of sustainable transportation solutions. NYSDOT began the design certification program by evaluating projects that had Plans, Specifications, and Estimates submitted after September 25, 2008. The certification program is modeled after the U.S. Green Building Council’s LEED program and the Greenroads Foundation’s Greenroads program. NYSDOT’s certification program builds on other environmental initiatives already taken by the agency and is part of a long-term program to encourage sustainable choices. The certification portion of the program is designed to be flexible, and to recognize and add new best practices and innovations as they emerge. NYSDOT continues to expand its suite of sustainability tools and to build sustainability into its programs and policies. Illinois—Livable and Sustainable Transportation Similarly, the Joint Sustainability Group of the Illinois DOT, the American Council of Engi- neering Companies–Illinois (ACEC-Illinois), and the Illinois Road and Transportation Builders Association (IRTBA) developed a voluntary system, I-LAST. The I-LAST Rating System and Guide (issued January 2010) describes sustainability in terms of transportation and provides a tool for identifying and documenting sustainable practices on highway projects in the state. Specifically, I-LAST does the following: • Provides a comprehensive list of practices that have the potential to bring sustainable results to highway projects • Establishes a simple and efficient method for evaluating transportation projects with respect to livability, sustainability, and their effect on the natural environment • Records and recognizes the use of sustainable practices in the transportation industry I-LAST identifies the following goals for sustainable projects: • Minimize impacts on environmental resources • Minimize consumption of material resources • Minimize energy consumption • Preserve or enhance the historic, scenic, and aesthetic context of a highway project

120 Sustainability as an Organizing Principle for Transportation Agencies • Integrate highway projects into the community in a way that helps to preserve and enhance community life • Encourage community involvement in the transportation planning process • Encourage integration of nonmotorized means of transportation into a highway project • Find a balance between what is important to the transportation function of the facility, to the community, and to the natural environment and what is economically sound • Encourage the use of new and innovative approaches in achieving these goals I-LAST includes a checklist-based scorecard for evaluating the sustainable practices included in a highway project, with 17 separate sustainable features in eight categories: • Planning: context-sensitive solutions, land use, community planning • Design: alignment selection, context-sensitive design • Environmental: protection, enhancement, or restoration of wildlife communities; protection, enhancement, or restoration of native plant communities; noise abatement • Water: reduction of impervious area; stormwater treatment; construction practices to protect water quality • Transportation: traffic operations; transit; improvement of bicycle and pedestrian facilities • Lighting: reduction of electrical consumption and stray light • Materials: use of environmentally benign or low-impact materials and/or environmental sound demolition, disposal, and construction techniques • Innovation: use of experimental feature(s) to improve the sustainability of a project For each of the sustainability features, the scorecard lists activities and the points that can be earned for each activity included on a project. It also provides an explanation and lists resources to help users better understand how to implement each of the sustainable features. These examples also show how rating and measurement systems can influence agency and private-sector behavior toward TBL principles. Various rating approaches are used to influence contract selection decisions, TBL-sensitive project development, and delivery. Infrastructure Voluntary Evaluation Sustainability Tool The FHWA recently developed INVEST, a web-based tool that contains a collection of sustain- ability best practices, referred to as “criteria” in the tool, that are intended to help transporta- tion practitioners measure sustainability in highway projects. INVEST is focused on sustainable highways rather than the broader subject of sustainable transportation. The purpose of INVEST is to identify these criteria, to assist organizations in researching and applying these criteria, and to establish an evaluation method to measure the benefits and progress of sustainable highway projects. The FHWA launched INVEST 1.0 in October of 2012. The tool was pilot tested across the country in 2011 and improved to reflect lessons learned. It also benefited from input by industry associations such as AASHTO and the American Society of Civil Engineers (ASCE). The tool includes six different scorecards for the evaluation of project development based on type of project (basic, extended, paving only, or custom) and location (urban or rural). Scorecards are also available for operations and maintenance programs, and system planning and processes. By offering transportation agencies a collection of best practices, INVEST serves two purposes. First, it helps identify workable solutions that allow agencies to incorporate sustainability into their transportation projects or programs. And, second, it gives them a tool for measuring their progress. DOTs or MPOs can use the results of an INVEST evaluation to support implementation of sustainable practices in pending planning or project decisions or to identify potential changes to business processes.

Near-Term Tools and Strategies to Consider 121 Version 1.0 of INVEST includes weighting for the project development criteria only. Criteria in the system planning and operations and maintenance modules are all equally weighted at 15 points (except the bonus criterion in system planning, which is valued at 10 points). A list of the criteria in each module is included in Section 8.1.1. The following paragraphs discuss the weighting of project development criteria. The overall goal of weighting is to make the point value for each criterion commensurate with its potential to affect sustainability both in terms of significance and duration of the impact. When using a set of criteria to evaluate performance toward meeting a goal, a key question is the extent to which the criteria are equally important in meeting that goal. If the criteria are of unequal importance, the measures of success can be improved by weighting the relative importance of the criteria. When assigning weights, the contribution to sustainability achieved from the worst likely outcome to the best likely outcome for one criterion should be compared to another. In other words, larger weights are assigned to criteria that are likely to have the largest impact on sustainability from project to project. As an example, envision two projects: one in which best-in-class environmental training is provided versus another where no environmental training is provided. The difference in sustainability likely to occur from that criterion is likely to be small (because training does not necessarily result in action), thus that criterion should be assigned a relatively low weight. Now envision two other projects: one in which best-in-class long-life pavements are designed and implemented and another in which they are not. Here the difference in sustainability associated with that criterion is likely to be substantial due to the cumulative benefits achieved over the project life cycle. Therefore, that criterion should be assigned a relatively high weight. INVEST can also be used to score a project based on total points achieved. A score is one measure of sustainability at one point in time. It reflects the number of sustainability best practices included and their relative impact on sustainability. INVEST can be used in a number of ways, including as a planning tool, a decisionmaking tool, and an evaluation tool. The user can choose to what extent to measure success against the absolute scale of how many overall points are achieved by a given program. INVEST may be used to score a program based on total points achieved. At this early point in its development, the tool contains rough estimations of the different achievement levels (including bronze, silver, gold, and platinum). Because INVEST is not based on third- party validation of scores or certifications, scores are not considered recognition by the FHWA that a program has met the achievement level of sustainability but rather recognition that the users have self-evaluated their program and met the indicated achievement level. Summary—Service and Project Delivery • Adopt standards and approaches to identify sustainable options and ensure selected materials or systems purchased meet sustainable requirements (as defined in the development of goals, objectives, and associated performance measures). • Consider embedding sustainability/TBL-related ratings and standards into operational activities related to provision of transportation services, products, and infrastructure— including development, design, construction, operations, traffic management, maintenance, and preservation. 7.7 Education and Cultural Development Interviews with stakeholders reveal a broad consensus that sustainability will require substantial cultural change within agencies, the private sector, and the public sector. In the current fiscal and eco- nomic climate, many agencies lack the resources and support to engage in broad new initiatives. In

122 Sustainability as an Organizing Principle for Transportation Agencies general, stakeholders believe it will be helpful to promote sustainability as an economy measure and as a more efficient means of delivering service. In particular, a change in the mindset is needed away from focusing on the traditional level of service (LOS) and on transportation as an end in itself to focusing on how transportation can improve community life and meet community needs. Stake- holders expressed a need for new, more holistic ROI tools that help to support and clarify the business case for sustainability, and to communicate the value of sustainability as a common-benefit initiative. Sustainable TBL is expected to require a new decisionmaking paradigm to manage TBL-sensitive transportation decisions across multiple modes and jurisdictions. Several states recently have embarked on bold initiatives to change the culture of DOTs away from the traditional LOS bias. These initiatives can serve as a model for how DOTs can move to greater support for sustainability. For example, in response to a perceived lack of confidence from stakeholders, limited funding, loss of knowledgeable employees, and a push from policy makers to outsource, the Louisiana Department of Transportation and Development initiated a major program of culture change (Bridges, 2008). It adopted a two-prong approach. First, it developed tools to demonstrate the ROI of any proposed change and carefully identified the changes that really would produce a difference in performance and service delivery. Second, it engaged the department head as the chief sponsor of the initiative. The chief sponsor communicated forcefully that this was a “change-or-die” situation and that it required maximum commitment. Multiple communications initiatives were launched to demonstrate the need for change, explain the rationale and proposed changes, and explain how people could be part of the change. The program focused on quick-wins, claiming low-hanging fruit, and building momentum for change (Bridges, 2008). Some governments have attempted to initiate development of a new culture through extensive public participation programs. The City of Perth, Australia, for example, in 2003, began a broad- based consultation process to create a new vision of the city. This process brought together more than 42 government departments and citizens and business groups to create a vision of Perth in 2030. As part of this exercise, a survey was conducted of more than 1,700 households, and a 1-day planning forum was held with more than 1,000 participants. At that forum, participants were broken down into 10-person teams, each given a particular transportation problem. Each team had to identify solutions and wrestle with the tradeoffs that planners face between sustainability, mobility, and economic growth. The result was a consensus plan known as “Network City,” which was widely supported and endorsed by all major interests and has as a goal that 60 percent of all new infrastructure and private construction be developed as car-free, sustainable networks (Schiller et al., 2010). Summary—Education and Cultural Development • Consider the development of a sustainability code of ethics for the agency that focuses on supporting a sustainable society. • Develop and conduct training activities with internal staff on incorporating sustainability principles in transportation decisionmaking processes. • Set employee initiative and performance incentives associated with sustainability. • Set up and maintain an internal news forum and discussion on sustainable TBL. • Support the development of sustainability-related coursework in regional education institutions, and encourage/support study by agency personnel. 7.8 Outreach and Communications Responsibility for supporting, planning, and executing sustainable TBL will likely extend beyond the traditional jurisdictional and modal organizational boundaries of national, state, and local transportation agencies—because TBL policymaking and resource decisions will

Near-Term Tools and Strategies to Consider 123 involve coordinated selection and execution of strategies by agencies and entities focused on all three bottom lines. Transportation will likely be called on to support and participate in policy (and possibly funding) decisions directly related to all three bottom lines as well. As authorities and TBL planning and management process requirements are gradually developed, the agency and interagency “lines and boxes” will emerge based on specific needs for oversight, decision- making, execution, and compliance. Existing agency roles and functions would necessarily continue, but TBL management could take a matrix form, cutting across not only internal organizational units but also across multiple external agencies. Private- and public-sector entities could jointly occupy points in that management matrix. As (and if) a TBL policy system evolves in the future, agencies that have acted to establish the needed external decisionmaking lines of communication and processes will be best prepared to transition to a more holistic funding and management approach to transportation services. In the meantime, agencies could examine these relationships and gain practical insight by establishing TBL-related coordination and communication processes, both within and outside existing organizational boundaries. Outreach • Consider establishing interagency coordination on TBL. Several interviewees noted that sustainability appears to be a top-down-driven process. However, most land use and trans- portation decisions are made at the regional and local levels, and, as indicated earlier, sustain- ability initiatives make it evident that there is an important bottom-up process in motion. Federal government and state agencies, MPOs, counties, municipalities, and modal agencies all would play significant roles in managing TBL. Establishing a coordination model with these entities could be an effective way to establish an overarching set of acceptable TBL goals and to execute TBL-related planning and decisionmaking functions across a region. • Establish intra-agency coordination. Sustainability applies to every stage of decisionmaking: planning, design, and implementation of projects and infrastructure as well as day-to-day O&M. All interviewees noted that addressing sustainability does not fit neatly into their existing organizational structures. Agencies may consider establishing and chartering a cross-cutting team or teams to coordinate activities supporting sustainability within the agency. Such teams also could play a significant role in developing the interagency linkages needed. Communication • Most stakeholders agree that better and ongoing communication is needed to describe an agency’s progress in achieving sustainability goals, objectives, and policies. • Transportation agencies must communicate with internal and external stakeholders about TBL through transparent indices, numbers, tables, graphs, scorecards, dashboards, and other information formats. • Communications on TBL-related issues would be most productive at this stage of TBL evolu- tion as a two-way process engaging a broad set of stakeholders—focused primarily on decision- makers and thought leaders, including public-sector representatives; trade and professional organizations; federal, state, and local agencies; and the private sector. The Florida DOT’s Corridor of the Future program provides useful practical experience for such an effort (Lee, n.d.). Summary—Outreach and Communications • Establish interagency and intra-agency coordination on TBL issues. • Conduct regular communication and information exchange activities with trade/professional groups, the private sector, and the public.

124 Sustainability as an Organizing Principle for Transportation Agencies • Keep outreach and communication activities ahead of the evolution of the transportation policy system. • Support overall outreach activities with relevant facts and figures as sustainable TBL initiatives progress. 7.9 Summary The research has shown that the principle gaps between today’s policy systems and sustainable TBL are found in the needs development, policymaking, and planning functions of transportation agencies. These functions will need to engage shared objectives and shared risk-taking among many stakeholder agencies in a region as well as private-sector actors. Institutional structures will form slowly as stakeholders grasp the commonality of mission needs and benefits under the TBL system. Tools and methods to inform, assist, and test the TBL concept and assess needed risk sharing between stakeholders will be most useful for agencies in the near term—pending what these tools and methods reveal about the practicality of managing TBL sustainability. It can be seen that many of the potential near-term actions address tools, methods, and TBL assessment framework development. Some suggestions in this chapter focus on situational assessment, and self-assessment to match real trends with the right agency capabilities to anticipate incremental changes and respond to them. A third category of suggestions deals with outreach, training, and educational programs to build professional capacity and share knowledge for the future.