The transport sector plays a crucial role in global efforts to mitigate carbon emissions and address climate change. This thesis conducts a comprehensive evaluation of the energy, carbon, and cost efficiency of rail and bus transit operations in the United States. The research's primary focus is threefold. Firstly, it evaluates the energy demand and efficiency of bus and rail transit operations, which is crucial for enhancing the energy efficiency of public transit companies and ensuring their environmental friendliness. Secondly, the research considers both desirable and undesirable outputs when assessing the technical and carbon efficiency of these operations. This dual assessment offers insights into methods for improving public transit's environmental performance and provides a comprehensive framework for transit authorities to identify specific areas for improvement, facilitating targeted interventions. Finally, the research also emphasises estimating the cost efficiency of public transit operations while considering their carbon impact. This approach ensures that transit operations are both financially viable and environmentally responsible. One of the primary objectives of this thesis is to evaluate the energy demand and efficiency of rail and bus transit operations, contrasting them with commonly used economy-wide approaches. Specifically, the objective is to examine the key factors influencing energy demand and inefficiency in transit operations. This objective is unique as it introduces a new dataset and novel econometric models that incorporate output characteristic variables such as average load factor, transit speed, and vehicle length. To achieve this, stochastic energy demand frontier functions are applied to a firm-level dataset to assess energy efficiency. The findings reveal that higher load factors and longer vehicles significantly enhance energy efficiency. Additionally, the analysis identifies an inverse relationship between transit speed and energy consumption, indicating that faster transit operations can reduce energy usage. The findings indicate that buses demonstrate a higher mean energy efficiency of 98.21% compared to rail at 91.53%. Key exogenous determinants affecting energy inefficiency include fleet age and the percentage of electricity used, with newer and more electrified fleets showing reduced energy consumption. The second objective of the thesis was to broaden the analysis by using a hyperbolic distance function to include both desired and undesirable output in the carbon and technical efficiency analyses. The underlying motive is to evaluate public transit firms' potential to provide more services with lower carbon footprints. The findings reveal that carbon efficiencies vary, with rail transit being able to potentially improve its desirable outputs by nearly 17.64% while simultaneously cutting down on carbon emissions and other factor inputs by 15%. For bus transit, the thesis shows that with an average carbon efficiency of 91%, firms could improve service offerings by roughly 9.9% while simultaneously reducing carbon emissions and other factor inputs by 9%. The findings underline the role of fleet age and the proportion of electricity use as key determinants of carbon inefficiency, with increased electrification associated with significant reductions in carbon inefficiency. The third objective is to investigate the cost efficiency of public transportation, taking into account the carbon effect on the cost structure. It identifies significant cost drivers and evaluates the scalability of transit operations through analyses of returns to scale and economies of density. The analysis identifies major cost drivers, including route kilometres, average load factors, and vehicle density, with energy and labour costs also playing significant roles. Rail transit shows an average cost efficiency level of 73.8%, whereas bus transit demonstrates a higher efficiency level of 90.4%. Significant determinants of cost inefficiency include fleet age and the proportion of electricity used, suggesting that modernising fleets and increasing electricity use can notably enhance cost efficiency. The findings suggest variability between rail and bus systems, with bus transit showing potential for higher cost efficiency through economies of scale and density. Specifically, the findings on economies of scale and density are particularly notable. Rail transit exhibits constant returns to scale and economies of density, suggesting that increasing the scale of operations might not necessarily lead to cost savings, but higher passenger density can decrease cost per passenger. Conversely, bus transit demonstrates evidence of economies of scale and density, indicating potential cost savings through increased scale and operational density. The research advocates for carbon-friendly transit measures, stricter emissions standards, and the adoption of modern fleets. This multifaceted analysis not only advances our understanding of sustainable transit practises but also equips transit authorities and policymakers with valuable insights for informed decision-making in pursuit of a greener and more cost-effective future in public transportation.
