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ECN publication
External costs of transport and internalisation: synthesis report on TopicA: external costs of transport
Published by: Publication date:
ECN Policy Studies 1996
ECN report number: Document type:
ECN-C--96-069 ECN publication
Number of pages: Full text:
190 Download PDF  

The transport sector is one of the basic structures of modern society.However, transportation also causes several effects that are harmful to human beings and nature, a problem which is too often ignored when decisions on transport activities are made. Considered from an economic viewpoint, this omission of environmental costs from decision making will lead to misallocation of resources and to market failure. In an attempt to correct for this, economists estimate the external costs of transport and try to internalize these costs in the price of transport. The estimation of external costs of transport is the subject of this report. A method for calculation of external costs of air pollution, climate change and noise caused by transport in the European Union (EU) is presented. The key question in this study is: to what extent can the avoidance cost methodology be used as a basis for an official evaluation of external costs by the EU and the member states? The specific objectives are: (1) provide a theoretical basis for the evaluation of external costs, review the literature on methodologies for estimation of external costs in the transport sector, compare advantages and drawbacks of the avoidance cost method with willingness-to-pay and damage cost approaches and carry out a survey of existing studies on the external costs of transport; (2) establish and describe suitable methods and the data requirements to assess avoidance costs of air pollution, climate change and noise; (3) collect data on emissions, impacts and technological avoidance options for vehicles and infrastructure and construct avoidance cost curves, compare survey results and estimate avoidance costs; and (4) provide information for the internalization process. 36 figs., 31 tabs., 84 refs

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