External costs issue

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 additional 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 as an implementation of the polluter pays principle to optimise the transport sector.