We strive to solve the problem of individual positive externalities and underinformation regarding sustainability. To solve it incentivize poisitive externalities and therefore internalizing them and indirectly increasing the private costs of creating negative externalities.
With the MVP we focus solely on mobility - urban mobility in the first place - where cycling and walking create the most significant positive externalities, therefore we will deal with them.
In 2015 18,164 trillion kilometers were travelled in urban areas globally, 8,117 trillion kms in OECD countries of which 303 and 107 billion kms were travelled in active ways, that is mostly by foot or by bike. (ITF Transport Outlook, 2019) We will focus on OECD countries in this brief overview as due to geolocation we would deal with OECD markets in the first years.
A Danish meta-study came to the conclusion that every cycled kilometer accounts for -0,184€ external costs, that is 18,4 eurocent benefit to the society calculated in EU area GDP per capita, while walking adds 37 eurocent per km. Both mainly due to health benefits. Whilst cars produce almost 11 eurocent external costs for the society per every km via air pollution, traffic and road occupancy. (Gössling, S., Choi, A., Dekker, K. and Metzler, D. 2018. The social cost of automobility, cycling and walking in the European Union. Ecological Economics 158: 65-74, doi.org/10.1016/j.ecolecon.2018.12.016)
We won't calculate the relative benefits of cycling/walking compared to driving cars, also to avoid overestimation we assume that only 10% of active kms are represented by walking.
There are partial solutions: Belgium and The Netherlands incentivize cycling via employers through paying a /km compensation, but their compound share is not greater than 15% OECD-wise, not even by assuming that all kilometers are compensated. (Cycling Facts - Netherlands Institute for Transport Policy Analysis) Some other EU members and the only ex-EU member country minorly incentivizes cycling which can account altogether to 10% of the problem.(ecf.com/sites/ecf.com/files/141117-Commuting-Who-Pays-The-Bill_2.pdf)
Therefore the lost value by individuals who contribute to the society is: 107billion(kilometers)*(0,9*0,184+0,1*0,37)=€21,68 - 25% that is €16,26 or $17,07 billion (in 2017’s worst exchange rates) which also equals to the societal gain and to the size of the problem in OECD countries.
So how big is the unpriced therefore unincentivized problem? It’s bigger than the GDP of Malta, or more than 10% of the Hungarian GDP and that’s just walking and cycling in the OECD countries.