Since opening in 2010, The Carmel Tunnels have redirected some of the traffic from within the City of Haifa in Israel. This paper studies the direct and indirect financial and environmental benefits of the Carmel Tunnels compared to alternative routes. Di-rect benefits for drivers include financial savings thanks to savings on time and gas. Indirect benefits for drivers and for the public include reduced air pollution, green-house gas emissions and noise. Results show significant positive benefits from using the Carmel Tunnels compared to various alternative routes (i.e., reference scenarios). During peak hours (8 am and 4 pm), when there is heavy traffic on the alternative routes, the total benefits increase by about 25% - 47%. Using tunnels for transportation allows, among other benefits, efficient use of underground land, redirecting traffic congestion from town centers, decreasing landscape damage due to major roads passing through open spaces, and reducing air pollution in residential areas.