Information published on 29 May 2012 in the UIC electronic newsletter "UIC eNews" Nr 294.

Report undertaken for the UIC shows clear advantages of rail when calculating external costs

The study, undertaken by consultants CE Delft, INFRAS and ISI for the UIC, found that per passenger-km, the external costs of cars or aviation are about four times those of rail transport, with a similar pattern for freight transport. Road transport is responsible for the overwhelming share of total external costs with a share of 93%. Passenger cars have a share of about 62%, followed by trucks (14%), vans (9%), motorcycles (5%) and buses (4%). From the non-road modes, passenger aviation (internal -European flights only) has the largest share in external costs with about 4%. Rail transport is responsible for less than 2% for both passenger and freight transport. Inland waterways (freight) only 0.3%. In total about 76% of the costs are caused by passenger transport and 24% by freight (see graph hereafter).

The total external cost of transport in the EU-27 (without Malta and Cyprus, but including Norway and Switzerland) amounted to more than €500 billion (2008 figures) - about 4% of total GDP. If congestion costs are included, this amounts to an additional 0.9%-1.9%, bringing the total impact of externalities to between 5% and 6% of GDP.

The external costs approach works by deciding on a monetary value for each impact (noise, CO2, air pollution, accidents, etc) and then calculating the total impact for each mode. The total and average cost estimates provide a strong basis for comparing the environmental burden of various transport modes and can also be used for general policy development by the Commission and by member states. Another application could be in cost benefit analysis for transport infrastructure projects, and the results of the study can also be used as a basis for transport pricing strategies.

These results come at a crucial time in the European transport policy debate. The better use of price signals through the internalisation of external costs was one of the main planks of the 2011 EU White Paper on Transport. The latest revision of the Eurovignette Directive, completed in 2011, also now allows Member States to calculate tolls for road freight that includes charges for air pollution and noise.

UIC Director-General Jean-Pierre Loubinoux said “This landmark report is yet another clear indication of the benefits of the rail sector in environmental, social and economic terms. It shows that rail has a key role to play in the development of a green economy”.

CER Director-General Libor Lochman said “These new figures underline the costs involved that society currently has to bear rather than individual users. We therefore hope that the Commission will push ahead with plans to further internalise external costs that would produce fairer competition between the different modes of transport, and create the conditions for modal shift in
favour of the less polluting modes.”

The Average External Costs

Total costs divided by traffic volumes indicate the average costs for each transport mode. It allows for an intermodal comparison, calculating the costs that could be avoided by means of shifting from one mode to another one with less external impact.
When considering the charts below it becomes clear that average external costs for road transport are more than four times higher than rail for passenger and more than six times higher for freight services (excluding congestion).