Internalisation of external costs

Internalisation of external costs will help to abolish distortion of competition between rail and road

The internalisation of external costs would mean that the price of transport as charged to users should reflect the real costs to society, including infrastructure costs and the external costs of emissions, accidents, congestion, noise and land use. This would encourage users to choose the least damaging vehicles, routes and modes, to only make trips that deliver net benefits to society, and to use existing infrastructure capacity more efficiently. In short, correct price signals would make the transport sector economically, environmentally and socially more efficient and fiscally fairer.

In Germany, in 2005, the general transport sector caused macro-economic costs of more than 80 bn EUR according to a recent study by INFRAS.

Road traffic is by far the most important cause for external costs. Whereas rail has a share of about 3.1%, road transport is responsible for 96% of all external costs. Until now road transport is not charged according to the costs it causes; on the contrary these costs are still carried by the public. This is purely subsidising road transport and of course leads to a strong distortion of competition between the different modes of transport, mainly discriminating rail. Referring to the “polluter pays” principle, a principle that is widely agreed on in international environmental law, the solution would be to charge the causer of the costs by means of higher tolls and charges.

Although this is one of the main means that has to be taken, at least in the medium term, the external costs have to be decreased through others than pricing measures. In order to come to reasonable results it has to be a package of measures that is tailor-made for the damages it wants to reduce, e.g. costs for accidents could be reduced by distinct speed limits or by optimising educational measures for drivers. In the field of climate air pollution costs could be reduced by a motor vehicle tax that depends on emissions and by funding research on more efficient engines.

So the list of measures and ideas available is quite long but it is quite clear as well that transport in general will get more expensive if we want to tackle this problem. This can only be solved by revising the existing “Eurovignette” directive.

For this revision the following objectives must be pursued:

• The full cost of damage to public health and the environment should be factored into the calculation of toll levels; the 60% addition proposed by the Transport Committee of the European Parliament represents an absolute minimum;
• Compulsory introduction of HGV tolls on the entire road network of all EU Member States after a transitional period;
• Compulsory introduction of HGV tolls from a weight threshold of 3.5 tonnes with no loopholes;
• Additional higher surcharges for environmentally sensitive regions;
• Introduction of a minimum rate for HGV tolls in Member States.