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External Costs

Monday 10 September 2012

The prices of transport in general – and road transport in particular – are artificially low. Transport prices do not cover air pollution and climate change, noise annoyance, the human toll of accidents, emergency and medical services, and higher insurance costs.

The real “marginal social costs” of all transport in 2000 in the then EU-15 plus Switzerland and Norway amounted to €650 billion, not including losses due to congestion. More than 80% of this cost is due to road traffic.The UIC has led ground-breaking research into external costs and transport :

Background Information

In order to ensure better harmonisation of intermodal competitive conditions, quantifications and differentiation of external environmental costs, generated by the transport as a whole should be carried out.

External costs are costs created by transport users and paid by society as a whole. These costs are not included in the transport prices because they are not internalised.

The existence of external effects and the low railway level creates many distortions of competition in the transport sector. It does not allow creating a level-playing field between transport modes and therefore affects seriously the competitiveness of the railways.

UIC and External Costs

UIC studies on external costs of transport (INFRAS-IWW 2004, 2000 and 1995) have shown quantitative figures from 2000, 1995 - including rough forecast for 2010- and 1990 for several externalities of transport in 17 Western European countries by different transport modes and spread by passenger and freight activities (rail, road, plane and waterways). These studies were and still an important basis for the determination of the level and structure of external costs of transport at the European level.

The 2004 up-date study was especially focused on accident, noise, air pollution, climate change, congestion costs but also costs for nature and landscape, additional costs in urban areas and for up/down-stream processes.

The figures consider total, average and marginal costs for all modes of transport and specific traffic situations.

In the meantime the question of external costs internalisation was pushed ahead through the Eurovignette Directive modification proposition and debate. The European Commission launched a study on external costs to review existing studies and choose how to evaluate each externality. Some internalisation scenarios were proposed and impact analysis completed.

Conclusion

In this context, the railways community needs a complete and current external costs picture to communicate on the level of external costs per main transport mode in competition with rail and show the low external costs generated by railway transport in comparison with other modes for European countries.

To know more about External Costs of Transport, please follow the link.