External Costs

External costs are costs generated by transport users and not paid by them but by the society as a whole such as congestion, air pollution, climate change, accidents, noise but also up- and down-stream processes, costs for nature and landscape or additionnal costs in urban areas.
There is a market failure because transport prices are not reflecting their costs and transport users are choosing their transport mode with a wrong price signal. UIC recommends internalisation of these external costs to allow transport users to take the right decisions and the polluter pays principle to optimise the transport sector.

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UIC studies

UIC is a pioneer in external cost study field on European scope for several transport modes: rail, road, air and also inland waterways.

The first one was launched in 1994 estimating four externalities such as accidents, noise, air pollution and climate change for 1990 year.

In March 2000, another study was completed on 1995 data with previous externalities considered (accidents, noise, air pollution and climate change) extended to improved cost estimation methodologies and also to new externalities such as congestion, up- and down-stream processes, nature and landscape and also additional costs in urban areas.

Up date study published end of 2004 considered the same externalities for 2000 data with accurate cost estimation methodologies per externality. Main results are total costs for EU15+2 countries amount to 650 billion € without congestion (around 7.3% of GDP),the most polluting mode is road with 84% of total costs when rail is less than 2%, congestion was evaluated at 3% of GDP, climate change at 30% of total costs, air pollution at 27%, accidents 24%.

The last study on 2008 data estimated total external costs for EU 25+2 (Norway and Switzerland) to €660-760 billion depending on wether low or high congestion values are used. (5 to 6% of GDP). The most polluting mode is road with 94%, air passenger with 4% and rail freight & passenger with 2%.

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External costs Calculator: Climate change and Accidents for freight

About the External Cost Calculator

The External Cost Calculator provides users the possibility of calculating the monetary value of climate change and accident costs on selected origin/destination routes for freight transport.
climate change and accident costs were chosen because they were omitted from the external costs that road freight may be charged for in the 2011 revision of the ’Eurovignette Directive’. Other external costs (e.g. air pollution, noise and congestion) are not currently included (and neither is passenger transport covered), but it is intended that future development of the tool will take into account additional external cost categories.

The tool is closely related to the EcoTransIT World tool. EcoTransIT World provides traffic and emission data for freight transport on selected origin/destination routes. The External Cost Calculator uses the same routing mechanism, logistical parameters and emission factors as in EcoTransIT World, with the same traffic and emission data for both tools.

External costs of climate change and accident costs are calculated at a further stage.

The External Cost Calculator contains both a standard and extended mode.
In the standard mode external costs considered are calculated based on default parameters in the tool (e.g. marginal external accident costs).
The extended mode provides users the opportunity to change some of the parameters themselves and run the tool based on the adapted parameters.

The tool covers the following modes: road, rail, inland waterways, short sea shipping and combined transport. Air transport is not included, since the share of air transport in total freight transport is negligible.

All external costs calculated in the tool are based on 2008 and are also expressed in the price level of 2008.

Contact

Snejana Markovic-Chenais
markovic@uic.org