Distance and time based road pricing trial in Dublin

The objective of the work was to evaluate the potential user response to distance and time based road pricing of a sample of individuals drawn randomly from a group of volunteers in Dublin. The road use pricing charge levels were selected to match the marginal external costs of car transport i.e. those costs not currently paid by the car user. Such costs include marginal external costs of congestion, air pollution and noise. The project formed part of the EU DGXVII EUROPRICE project where one of the objectives was to evaluate the impact of road use pricing on private transport demand. Estimates of the marginal external costs of car travel had been previously made for Dublin in an EU DGVII project entitled TRENEN II STRAN and the results were used to select the road pricing charges in the trial. The distance travelled and travel time of a particular individual's work trip were noted. Charges per unit distance and time were applied so that the individual would incur a total charge for their average peak period work trip of 6.4 euro; the average marginal external cost of a peak period trip in Dublin, as estimated by the TRENEN model. Although the sample of individuals was relatively small, the indications from the results are worthy of note and further investigation on a larger sample. A significant reduction in the number of peak period trips was evident, of the order of 22%, resulting from trip suppression and transfer to other modes. This revised version was published online in June 2006 with corrections to the Cover Date.     

External costs of the Belgian interurban freight traffic: a network analysis of their internalisation

The strong expansion of freight road transports throughout Europe is an important source of congestion and pollution, as well as a cause of many accidents. To solve this problem will require the conjunction of many different remedies. One element of solution would be the promotion and substitution of transportation modes with less negative effects. This paper is focused on this solution. It presents some results obtained from a detailed GIS modelling of the Belgian multimodal freight transport network inserted within the overall trans-European network. It outlines the results of a simulation of the flows over the Belgian network in 1995 which allows to estimate some of the costs of several external effects of freight transports: the costs of pollution, congestion, accidents, noise and road damages. This paper provides also the simulated impacts on modal choice of a marginal external cost internalisation, and an estimation of the corresponding external cost savings.     

Marginal costs of freeway traffic congestion with on-road pollution exposure externality

The health cost of on-road air pollution exposure is a component of traffic marginal costs that has not previously been assessed. The main objective of this paper is to introduce on-road pollution exposure as an externality of traffic, particularly important during traffic congestion when on-road pollution exposure is highest. Marginal private and external cost equations are developed that include on-road pollution exposure in addition to time, fuel, and pollution emissions components. The marginal external cost of on-road exposure includes terms for the marginal vehicle’s emissions, the increased emissions from all vehicles caused by additional congestion from the marginal vehicle, and the additional exposure duration for all travelers caused by additional congestion from the marginal vehicle. A sensitivity analysis shows that on-road pollution exposure can be a large portion (18%) of marginal social costs of traffic flow near freeway capacity, ranging from 4% to 38% with different exposure parameters. In an optimal pricing scenario, excluding the on-road exposure externality can lead to 6% residual welfare loss because of sub-optimal tolls. While regional pollution generates greater costs in uncongested conditions, on-road exposure comes to dominate health costs on congested freeways because of increased duration and intensity of exposure. The estimated marginal cost and benefit curves indicate a theoretical preference for price controls to address the externality problem. The inclusion of on-road exposure costs reduces the magnitudes of projects required to cover implementation costs for intelligent transportation system (ITS) improvements; the net benefits of road-pricing ITS systems are increased more than the net benefits of ITS traffic flow improvements. When considering distinct vehicle classes, inclusion of on-road exposure costs greatly increases heavy-duty vehicle marginal costs because of their higher emissions rates and greater roadway capacity utilization. Lastly, there are large uncertainties associated with the parameters utilized in the estimation of health outcomes that are a function of travel pollution intensity and duration. More research is needed to develop on-road exposure modeling tools that link repeated short-duration exposure and health outcomes.     

Transport policy prioritisation for Dublin

Internalisation of the external costs of transport is currently the subject of much debate. Estimation of costs such as those of pollution and congestion is a primary element in any strategy involving policies for use in the internalisation of these costs. The objective of the TRENEN II STRAN project, funded by the EU, was to develop a methodology for estimation of the marginal external costs of transport. The model developed during the project was used in a series of case studies. One of the case studies, that conducted for Dublin, is reported in this paper. A brief summary of the TRENEN approach is presented followed by the results for Dublin produced from policies such as Do Nothing, Uniform pricing (internalising external costs by means of fuel taxation), Congestion Pricing (cordon pricing) and a first-best policy, the Full Optimum where one assumes that the policy maker has perfect pricing instruments available. As one would expect, the model shows that the greatest reduction in traffic level and external costs would occur if it were possible to introduce a highly differentiated and sophisticated pricing system. Increased taxation on fuel is not an efficient policy as it does not address the marginal external costs of congestion in a way that time-differentiated road-use pricing would. The results from testing of the different measures are interesting particularly those relating to parking and the way in which residents within the CBD and commuters to the CBD are dealt with. This revised version was published online in June 2006 with corrections to the Cover Date.     

Estimating the marginal cost of railway track renewals using corner solution models

Economic theory advocates marginal cost pricing for efficient utilisation of transport infrastructure. A growing body of literature has emerged on the issue of rail marginal infrastructure wear and tear costs, but the majority of the work is focused on costs for infrastructure maintenance. Railway track renewals are a substantial part of an infrastructure manager’s budget, but in disaggregated statistical analyses they cause problems for traditional regression models since there is a piling up of values of the dependent variable at zero. Previous econometric work has sought to circumvent the problem by aggregation in some way. In this paper we instead apply corner solution models to disaggregate (track-section) data, including the zero observations. We derive track renewal cost elasticities with respect to traffic volumes and in turn marginal renewal costs using Swedish railway renewal data over the period 1999–2009. This paper is the first attempt in the literature to apply corner solution models, and in particular the two-part model, to disaggregate renewal cost data in railways. It is also the first paper that we are aware of to report usage elasticities specifically for renewal costs and therefore adds important new evidence to the previous literature where there is a paucity of studies on renewals and considerable uncertainty over the effects of rail traffic on renewal costs. In the Swedish context, we find that the inclusion of marginal track renewal costs in the track access pricing regime, which currently only reflects marginal maintenance costs, would add substantially to the existing track access charge. EU legislation requires that access charges reflect the ‘costs directly incurred as a result of operating the train service’, which should include a marginal renewal cost component. This change would also increase the cost recovery ratio of the Swedish infrastructure manager, thus meeting a policy objective of the national government.     

Assessing the social costs of urban transport infrastructure options in low and middle income countries

ABSTRACT

This paper develops cost models for urban transport infrastructure options in situations where motorcycles and various forms of taxis are important modes of transport. The total social costs (TSCs) of conventional bus, Bus Rapid Transit (BRT), Monorail, Metro (Elevated Rail), car, motorcycle, Taxi and Uber are calculated for an urban corridor covering operator, user and external costs. Based on the parameters for a 7?km corridor in Hanoi, Vietnam, the results show the lowest average social cost (ASC) transport modes for different ranges of demand. Motorcycle might be the best option at low demand levels while conventional bus has advantages with low-medium demand. At medium demand levels, bus-based technologies and Monorail are competitive options while Metro, with a higher person capacity, is the best alternative at the highest demand levels. Compared to other modes, the ASCs of car and Taxi/Uber are greater because of high capital cost (related to vehicles) per passenger and low occupancy. Transport planners and decision makers in low and middle income countries (LMICs) can draw on the findings of this study. However, various limitations are identified and additional research is suggested.     

Intertemporal issues and marginal abatement costs in the UK transport sector

An energy system model, UK MARKAL, is combined with decomposition analysis and sensitivity analysis to derive mitigation costs and emissions reduction potentials in the UK transport sector. The paper tests the robustness of a marginal abatement cost curve for the year 2030 for two parameters: path dependency and discount rate. Path dependency is found to be a significant, yet not substantial, influencing factor on the shape and the structure of the marginal abatement cost curve. Doubling the technology-specific hurdle rates shows that abatement costs increase significantly. The results suggest that policy makers should be aware of the underlying carbon tax pathway and whether results are based on society’s view or a private perspective.     

Evaluation of urban accessibility indicators based on internal and external environmental costs

This paper estimates urban accessibility considering types of transport and destinations, taking into account the internal travel time costs, and the ensuing external environmental impacts. Based on online and local surveys, an accessibility function is developed to allow for the construction of an accessibility curve for each transport mode that decreases with distance to represent decaying accessibility. An external environmental impact is associated with the accessibility indicators, taking into account the influence of the cold-start emissions that are particularly relevant for short-distance trips. The methodology is applied to neighborhoods in Lisbon, Portugal, with significant differences in their urban planning, mobility patterns, concentration of services and availability of public transportation.     

A review and analysis of the investment in,and cost structure of,intermodal rail terminals

The results presented in this article identify the role of costs in the scientific and grey freight terminal handling literature and analyses the handling costs of different terminal sizes. The literature review shows that handling costs only play a marginal role in the scientific research in intermodal rail freight terminals (IRT). This is remarkable given the large role costs occupy in decision-making in freight transport. Furthermore, the used cost levels show a wide range of proposed amounts and terminal sizes or handling technologies are seldom addressed. Finally, many of the scientific papers do not make it clear whether the average transhipment cost or market price is referred to. Next, the analysis of the investment in, and cost structure of, IRTs shows that IRT investments are very capital-intensive leading to relatively high average costs per handling. However, given the cost characteristics of IRTs, the average cost per handling represents the underlying cost structure and are – in this sense – representative. The cost analysis demonstrates that extra-large IRTs actually have the lowest average handling costs, followed by small IRTs.     

Costs of air pollutants from shipping: a meta-regression analysis

ABSTRACT

This study estimated the external cost of air pollution from shipping by means of a meta-regression analysis, which has not been made before. Three pollutants, which were included in most of the primary studies, were considered: nitrogen oxides (NO_x), sulphur dioxides (SO₂) and particulate matters with a diameter of max 2.5 micrometres (PM_2.5). All primary studies included damages of health and a majority added impacts on agriculture and estimated the cost of air pollutants by transferring cost estimates from studies on costs of air emissions from transports in Europe. Different regression models and estimators were used and robust results were found of statistically significant emission elasticities of below one, i.e. total external costs increase by less than 1% when emissions increase by 1%. There was a small variation between the pollutants, with the highest elasticity for PM_2.5 and lowest for NO_x. Calculations of the marginal external cost of the pollutants showed the same pattern, with this cost being approximately six times higher for PM_2.5 than for the other pollutants. Common to all pollutants was that the marginal external cost decreases when emission increases. Another robust result was a significant increase in the cost of studies published in journals compared with other publication outlets. These findings point out some caution when transferring constant external unit cost of air pollutant from shipping, which is much applied in the literature, and the cost functions estimated in this study could thus provide a complementary transfer mechanism.     

Road pricing with complications

The rationale for congestion charges is that by internalising the marginal external congestion cost, they restore efficiency in the transport market. In the canonical model underlying this view, congestion is a static phenomenon, users are taken to be homogenous, there is no travel time risk, and a highly stylised model of congestion is used. The simple analysis also ignores that real pricing schemes are only rough approximations to ideal systems and that inefficiencies in related markets potentially affect the case for congestion charges. The canonical model tends to understate the marginal external congestion cost because it ignores user heterogeneity and trip timing inefficiencies. With respect to the relevance of interactions between congestion and congestion charges and tax distortions and distributional concerns, recent insights point out that there is no general case for modifying charges for such interactions. Therefore the simple Pigouvian rule remains a good first approximation for the design of road charging systems.     

Locating charging infrastructure for electric buses in Stockholm

Charging infrastructure requirements are being largely debated in the context of urban energy planning for transport electrification. As electric vehicles are gaining momentum, the issue of locating and securing the availability, efficiency and effectiveness of charging infrastructure becomes a complex question that needs to be addressed. This paper presents the structure and application of a model developed for optimizing the distribution of charging infrastructure for electric buses in the urban context, and tests the model for the bus network of Stockholm. The major public bus transport hubs connecting to the train and subway system show the highest concentration of locations chosen by the model for charging station installation. The costs estimated are within an expected range when comparing to the annual bus public transport costs in Stockholm. The model could be adapted for various urban contexts to promptly assist in the transition to fossil-free bus transport. The total costs for the operation of a partially electrified bus system in both optimization cases considered (cost and energy) differ only marginally from the costs for a 100% biodiesel system. This indicates that lower fuel costs for electric buses can balance the high investment costs incurred in building charging infrastructure, while achieving a reduction of up to 51% in emissions and up to 34% in energy use in the bus fleet.     

Harmonizing heavy goods vehicle taxes in Europe: a British view

One of the biggest unresolved problems regarding the completion of the free internal transport market within the European community is the problem of harmonization of taxation on the road haulage industry. As the highest tax country, Britain might be expected to have to reduce its level of taxes as part of any harmonization.

This paper considers the current methodology of the British Department of Transport regarding the allocation of the track and external costs of road transport, in the light of developments in methodology and experience elsewhere in Western Europe and North America. We find a number of reasons for believing that, far from overstating the marginal social cost of use of roads by the road haulage industry, the current British approach actually understates it. Thus any move towards harmonizing tax levels may reduce taxes in Britain at a time when they should be increasing.     

Measuring marginal congestion costs of urban transportation: Do networks matter?

In determining the marginal cost of congestion, economists have traditionally relied upon directly measuring traffic congestion on network links, disregarding any “network effects,” since the latter are difficult to estimate. While for simple networks the comparison of the network-based congestion costs with the link-based ones can be done within a theoretical framework, it is important to know whether such network effects in real large-scale networks are quantitatively significant.In this paper we use a strategic transportation planning model (START) to compare marginal congestion costs computed link-by-link with measures taking into account network effects. We find that while in aggregate network effects are not significant, congestion measured on a single link is a poor predictor of total congestion costs imposed by travel on that link. Also, we analyze the congestion proliferation effect on the network to see how congestion is distributed within an urban area.     

The marginal social cost of headway for a scheduled service

This brief paper derives the marginal social cost of headway for a scheduled service, i.e. the cost for users of marginal increases to the time interval between departures. In brief we may call it the value of headway in analogy with the value of travel time and the value of reliability. Users have waiting time costs as well as schedule delay costs measured relative to their desired time of arrival at the destination. They may either arrive at the station to choose just the next departure or they may plan for a specific departure in which case they incur also a planning cost. Then planning for a specific departure is costly but becomes more attractive at longer headways. Simple expressions for the user cost result. In particular, the marginal cost of headway is large at short headways and smaller at long headways. The difference in marginal costs is the value of time multiplied by half the headway.     

A meta-analysis of Western European external costs estimates

This paper analyses the external transport cost estimates that have been found in various European studies. These estimates seem at first glance to be highly dispersed, a fact which raises questions about their reliability. The article offers a list of the possible reasons for discrepancies between the various studies; differences in the specific situations studied, in the type of cost calculated, in the physical laws relating to emissions, in the measurement of values of external costs. It assesses the relative magnitude of each of these causes through a meta-analysis. It turns out that the main differences come from the specificity of the situation under review and the type of cost calculated. In comparison, differences in the laws and in the values methods have a lower importance. The conclusion is that the estimates of external costs are reliable for decision-making policies.     

External costs of electric vehicles

Electric vehicles (EV) are often considered a promising technology to decrease external costs of road transport. Therefore, main external cost components are estimated for EV and internal combustion engine vehicles (ICEV). These include costs of accidents, air pollution, climate change, noise, and congestion. All components are estimated over the product lifetime and, where appropriate, differentiated according to fuel type, vehicle size as well as emission location and time. The advantage of this differentiation is, however, compensated by high uncertainties of most cost estimates. Overall, the external costs of EV and ICEV do not differ significantly. Only for climate change, local air pollutants in congested inner-cities, and noise some advantageous effects can be observed for EV. The advantages depend strongly on the national electricity power plant portfolio and potentially also on the charging strategy. Controlled charging might allow for higher emission reductions than uncontrolled charging of EV.     

The private and social cost efficiency of port hinterland container distribution through a regional logistics system

Increasingly, the debate on freight transport and logistics involves the challenge of sustainable development. Key objectives of sustainable or “green” freight logistics systems are the mitigation of negative environmental and human health effects of distribution operations and the realization of a major modal shift in transport preferences, while at the same time achieving internal generalized cost efficiency and quality of services. Pursuing these goals requires the introduction of a range of measures. These measures call for private and public actors to take up various initiatives and adopt policies. Usually, it is more effective to combine different actions into an integrated package of measures than to introduce single instruments in isolation.This article explores the nexus between sustainability and port hinterland container logistics. In particular, the methodology and results of an empirical analysis based on applications of a network programming tool called the “interport model” are presented and discussed. The model enables an examination of all possible effects on inland container flows and their associated internal and external costs due to public and private initiatives in the field of port hinterland container logistics. The empirical analysis aims to evaluate the impact of a set of simultaneous policy options and operational measures on the competitiveness and sustainability of hinterland multimodal distribution of import and export containers handled at the seaports of the Campania region located in Southern Italy. The loading units can transit through the dry port facilities (the so called “interports”) located in the same region and/or through extra regional railway terminals, before reaching their ultimate inland destinations or the seaports. The integrated package of measures simulated by means of the model includes: (i) infrastructure policy, (ii) improvements of rail services, (iii) regulatory changes in terms of customs authorizations and procedures, (iv) removal of technical and legal barriers to fair and non-discriminatory competition in the market of rail traction between regional seaports and interports, (v) new business models integrating container logistics operations between seaports and interports, and (vi) social marginal cost charging of transport operations. Once this package of instruments is introduced, higher private and social cost efficiency of port hinterland container distribution through the investigated regional logistics system can be achieved. For instance, it has been estimated an annual saving of the order of about 12,660 tonnes of CO₂ equivalent emissions from transport corresponding to an external cost reduction of 0.27 million euros from the observed real life situation, whereas the estimated saving in terms of air pollution (CO, NO_x, PM, SO₂, VOC) from transport is approximately 220 tonnes per year corresponding to an external benefit of 1.31 million euros.The most immediate priority appears to be the customs and intermodal logistics integration of seaports and interports by means of full implementation of the “extended gateway” concept as a way to increase the rail share of modal split and improve the overall cost efficiency of the system. In addition, the simultaneous introduction of a social marginal cost charging policy can contribute to make the regional interports a viable solution to expand the hinterland reach of the regional seaport cluster.     

External Costs of Domestic Container Transportation: Short‐Sea Shipping versus Trucking in Taiwan

Abstract

This paper explores the external costs of domestic container transportation in Taiwan by analysing the origin and destination of current container cargoes. After reviewing an extensive literature survey of methods of external cost, a comparison of external costs between trucking and short sea shipping (SSS) by corridor is made by using a model developed in this paper. Based on the findings that external costs of SSS are considerably lower than truck transport and can be a viable alternative to current domestic container cargo transportation, we discuss the significance and managerial implications of SSS from the perspective of green logistics. In so doing, a top‐down approach is employed for developing government policies, which aim to not only reduce the external costs of domestic container transportation but also promote SSS in Taiwan.