External cost calculation for selected corridors

WP-leader:  IER, University of Stuttgart
(contact)

The objective of WP4 is to provide marginal external cost estimates for intermodal and uni-modal (road) transport activities on the trans-european case-study corridors. These external costs will be calculated following the bottom-up Impact Pathway Approach developed in the ExternE-projects and the recommendations of the working groups for the High Level Group on Infrastructure Charging. The following impact categories will be addressed:

Air pollution	Noise	Climate Change
human health building materials agricultural products ecosystems	human health annoyance house depreciation	via sustainability indicators	human health	Time costs
Accident Risk	Congestion and Slot Scarcity	Biodiversity and severance effects

At first, the projected work aims to validate the framework developed in WP1 and WP2. The methodology for data collection and cost calculation (WP1) will be tested and corrected if necessary before Task 4.1:Data compilation will be launched. The expected output of Task 4.1 is to provide all basic data which are necessary for the calculation of external costs. The actual calculation of external costs will take place in Task 4.2: Calculation of external costs from direct emissions and Task 4.3: Calculation of external costs from life cycle emissions. The final output of this workpackage will be the marginal external cost values for the door-to-door transport chains of each of the three case-study corridors.

Task 4.1:
Data compilation

Following WP2, the relevant data for the calculation of external costs will be compiled. All partners are involved in this task with different responsibilities in order to cover all countries crossed by the transport corridors. The countries to cover are: Italy, Hungary, Germany, Switzerland, Austria, Nordic countries, United Kingdom,  Poland, France, Spain, Netherlands, Czech Republik, Greece and Slovenia.

Data, which are necessary for the calculation are for example:

	Co-ordinates and lengths (and slope for road) of road, rail, inland waterway transport trajectories.
	population distribution near the transport corridors (radius ca. 50 km).
	Traffic flow data on transport links (velocities, traffic volume, etc).
	fleet composition
	accident statistics
	etc.

Further information on the data compilation will be given here as the work progresses.

Task 4.2:
Calculation of external costs from direct emissions

The transport corridors and tasks chosen for analysis will be disaggregated into 'building blocks', i.e. segments with homogenous characteristics (emissions, velocity, road category,...) along the method adopted and successfully tested within QUITS and ExternE. Marginal external costs from direct emissions will then be calculated for all 'building blocks' following the bottom-up impact pathway approach developed in the ExternE and the recommendations and procedures described in the working papers for the High Level Group on Infrastructure Charging (DGVII). In particular, the EcoSense model will be used to carry out the damage estimates on the local and  regional scale. External costs will be calculated for each individual element of the transport chain (link and node) based on the detailed specification of the route, mode and technology used. Results will be presented in a disaggregated form (by type of cost), so that the main contributors to the external costs and the potential for improvements can be easily identified.

Task 4.3:
Calculation of external costs from life cycle emissions

While the direct emissions from a vehicle’s use phase contribute to the major fraction of externalities, ‘indirect’ impacts resulting from e.g. fuel and infrastructure supply are of increasing importance as direct emissions of vehicles, ships, or aircraft are decreasing. Environmental burdens resulting from the steps in life cycle will be quantified based on data available in the literature. As in most cases the emission site is unknown and thus no site specific impact assessment modelling is possible, life cycle emissions will be converted into external costs by using average damage factors in terms of Euro per kg of pollutant, that are derived from EcoSense runs with emission distributions, that reflect the spatial distribution of the considered industrial branch in each country (based on CORINAIR data).

The Impact Pathway Approach

Most early studies on transport externalities followed a top-down approach, giving average costs rather than marginal costs. But according to economic theory, marginal costs are required as adders to the price of transportation. Moreover, the impacts of transport activities are highly site-specific, as can most obviously be seen for noise: noise emitted in densely populated areas affects many people and thus causes much higher impacts than noise emitted in sparsely populated areas. The starting point for the assessment of marginal damages is the micro level, i.e. the traffic flow on a particular route. The marginal external costs of one additional vehicle are calculated for a single trip. Only a detailed bottom-up approach meets the requirements of quantifying marginal costs considering technology and site specific parameters.

The Impact Pathway Approach developed in the EC funded ExternE Project meets these requirements. Figure 1 illustrates the models used for quantifying impacts due to airborne pollutants. It can be transferred to other impact categories such as noise, accidents etc. For impacts due to airborne emissions the chain of causal relationships starts from the emission of a burden through transport and chemical conversion in the environment to the impacts on various receptors, such as humans, crops, building materials or ecosystems. As far as possible, welfare losses resulting from these impacts are transferred into monetary values. Based on the concepts of welfare economics, monetary valuation follows the approach of ‘willingness-to-pay’ for improved environmental quality.

It is important to note, that, although marginal costs are estimated, the emissions from all other sources and the background concentration influences the marginal change in concentration and deposition of the primary and secondary pollutants caused by the additional emissions; so all emissions and the resulting concentrations have to be accounted for in the framework.

Figure 1. The Impact Pathway Approach for the quantification of marginal external costs caused by air pollution and noise

The impact pathway methodology has been used in a large number of research projects and policy application related studies. In spite of still significant uncertainties in some areas, the Impact Pathway Approach is widely recognised now as the most reliable tool for environmental impact assessment that - in contrast to other methodologies - allows the estimation of site specific marginal external costs. Appropriate models are available now that support the standardised implementation of the complex impact pathway methodology with a reasonable effort.

High Level Group on Infrastructure Charging

The European Commission convened a High Level Group of transport specialists to examine the extent to which changes in user charging (along the lines proposed in the Commission’s Green paper “Towards Fair and Efficient Pricing in Transport”), might assist in addressing these problems, and how the practical implementation of the recommended changes might best be achieved.

A number of expert advisors were appointed by th High Level Group for consultancy in specific fields of knowledge. Amongst others, Dr Andrea Ricci from ISIS, co-ordinator of the RECORDIT project, and Professor Dr. Rainer Friedrich from IER were responsible for the final report on environmental costs.

Contact

For further information on external costs of transport please contact:

Stephan Schmid
IER - Institute of Energy Economics and the Rational Use of Energy, University of Stuttgart
Hessbruehlstrasse 49a D-70565 Stuttgart

Phone:	+49  711  7806155
Fax:	+49  711  7803953

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