ABSTRACT

The growing social pressures resulting from transport (in terms of environmental degradation, noise annoyance, accidents and congestion) have led to a large body of literature on the external costs of transport (Verhoef, 1994a). The extensive research efforts, however, have not yet been able to initiate the political response that is often hoped for wi th the publication of the research findings. Apart from an apparent lack of political priority (or perhaps courage) to engage i n more stringent environmental policies regarding transport, a number of factors contribute to the fact that many of the policy recommendations have not been followed. In the first place, regulators do have to make a practically inescapable trade-off between the efficiency and social feasibility of policies (Verhoef, N i j k a m p and Rietveld, 1995). Furthermore, due to differences i n the interpretation of the concept of externalities and the wide range of techniques and methodologies employed in the estimation of such effects, empirical estimates of external costs of transport may differ by a factor of ten or more - whereas they often intend to measure the same thing. Next, there is still no consensus on the question of whether 'external benefits' of transport might compensate for the external costs. In addit ion, debates on the implications of the research f indings are often further clouded by a mixing up of arguments of an allocative efficiency and of an equity nature. In this chapter, some of these issues are dealt with . The next section starts wi th discussing the definition of externalities. A p p l y i n g this definition, it w i l l be concluded that transport hardly yields any positive external effects. However, considerable negative externalities are involved. The section after that deals w i t h the efficiency and equity impacts of externalities. Finally, some recent estimates of external costs of transport i n the Netherlands are discussed.