This will probably be more than outweighed by the savings in public health due to less pollution. Air pollution kills and harms so many people every year.
Sure, but I have zero confidence that policymakers will look at it this way. We all know that budgets are largely non-transferable between departments, so just because we are spending less money on health issues I can guarantee no one will transfer this money over road maintenance. That's not how it works.
Nor should it work that way automatically, IMO. We need a certain amount to spend on X and an amount to spend on Y.
If X becomes cheaper, the right thing to do (IMO) is to return the savings to the people, not to spend the surplus on Y or find a new Z to spend it on. If the people want to choose to spend more on Y or Z now that they've seen the savings on X returned to them, that's perfectly rational possibility, but shouldn't be automatic.