Transition towards urban sustainability through socially integrative cities in the EU and in China

Methodologies for the evaluation of external costs of transport (SCBA)

1. Purpose(s)

A particular application of Social Cost Benefit Analysis to urbanisation activities, providing an updated guidance to the evaluation of external costs of transport and mobility in urban and extra-urban areas. The evaluation addresses environmental (air pollution, noise, climate change and well-to-tank costs), and social costs (congestion and accidents). Methodologies of calculation, input values and results are accompanied by caveats on robustness and limitations, of primary importance in case of transferability and generalisation of results.

Key Words: Polluter-pays-principle, Impact Pathways Approach, social costs of transport activities

2. Relevance and Impact

The relevance of the methodologies and tools for the evaluation of external costs of transport relies in their direct reference to the "improving the environment and living conditions in urban areas", which is a key feature of a socially integrative city. Indeed, the application of SCBA in the assessment of the costs of accidents, noise and air pollution emissions, congestion and greenhouse effects may provide a direct contribution to the design of sustainable transport policies, improving environment and quality of life in urban areas.

During the TRANS-URBAN-EU-CHINA project, the application of the methodologies has produced an assessment of congestion costs in the cities of Rome and Beijing. The case studies on the evaluation of congestion costs in Rome and Beijing showed similarities and differences in the underlying methodologies. Similar approaches concerning the identification of the key components of the road congestion costs formula were found: from time spent in congestion to the monetization of the value of time. However, in the case of Rome, the inclusion of the freight sector contribution to congestion and a more complex composition of the factors determining the value of time has represented the key methodological differences with the Chine approach.

The calculation of external costs of transport may have significant impacts in setting transport policies and managing urbanisation activities, e.g. planning urban forms; in particular by supporting the definition of transport policies with quantitative evaluations in the direction of sustainability. In such a way, the assessment of transport external costs may improve the knowledge-base of urbanisation processes; assessing the costs of urban sprawl on citizens' mobility and estimating the toll that congestion may have on accessibility to urban services and functions. The toll of external transport costs, just for car urban congestion costs, amounts to billions of € in Europe (Figure 2).

3. Strenghts

Methodologies, i.e. procedures, data requirement, calculation functions and parameters estimated in a given context, e.g. in a specific traffic situation in a given city, can be generalised to different socio-economic contexts (other cities).  The available methodologies provide for each external cost category recommendations on the best practice methodologies to estimate total/average and marginal external cost values and how to transfer them in different contexts. Using these methodologies, it can be possible to produce own differentiated cost figures based on case specific input values, which may transferred in other contexts when data are missing.

4. Weaknesses


The calculation of external costs of transport requires the availability of case-specific estimates of key input parameters and evaluation models. Besides, results (marginal and average external costs) are mostly related to EU28 and their transferability id different contexts, as such to the Chinese case, may need carefully adaptations; for example taking into account of different purchasing powers. Also, different institutional and political contexts may hamper the full exploitation of external costs of transport in every day policy settings, e.g. charging transport users for the costs they impose to the society.

5. Good practice examples

In Europe, a best practice in the area of evaluation of external costs is the Handbook on the external costs of transport, prepared by the European Commission and regularly updated since 2008 (Figure 3).

In 2008, the European Commission commissioned the first Handbook on External Costs of Transport, as part of the IMPACT study (Infras, CE Delft, ISI & University of Gdansk, 2008). The updated Handbook in 2014 (Ricardo-AEA) and 2019 (CE Delft 2019) presents the best practice on the methodology to estimate different categories of external costs of transport. Additionally, it provides an overview of state-of-the-art input values (e.g. the value of time or the value of a statistical life) that can be used to produce estimations of external costs by users of the Handbook themselves. Finally, the Handbook presents external cost figures (mostly presented in €/vehicle kilometre), which can be used directly by the users.

In China, the methodologies for the calculation of external costs have been applied in several case studies, e.g. Zong Gang(宗刚), Li Cong(李聪) 2014 Quantitative analysis and calculation of the negative externality of Beijing transportation system. In the TRANS-URBAN EU CHINA project, an interesting application of the Impact Pathways Approach has been provided with reference to the evaluation of negative externalities in transportation activities arising from increasing touristic flows (Figure 4).

6. Further helpful study material

7. References

8. Author(s) of the article

Andrea Ricci, Riccardo Enei