Internalisation of External Costs of Transport in Flanders

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The MIRA-research report “Internalization of external costs of transport in Flanders”  (2010) estimated the private costs, the external costs, and the degree of internalization of transport for the period 2000-2008. Six years later it is time to update this report.
As in the previous study, we calculated the private and marginal external costs for different transport modes. The private costs are the costs for the user. For road transport these include the vehicle purchase costs, insurances, maintenance, fuel costs, etc. For regulated transport (bus, train, plane) this is the ticket price. Marginal external costs are external because the user does not take them into account when deciding to make a trip. They are called marginal as we focus on the additional effect of that one trip.

We distinguish the following marginal external costs:
  • Congestion
  • Environment (air pollution and greenhouse gasses)
  • Noise
  • Safety
  • Infrastructure
  • Health
Internalization of external costs determines the extent to which the user does take into account part of these external costs via taxes and levies. In the case of full internalization, the user pays for all the costs he causes via taxes and levies. Today, in most cases, the user does not pay the full costs he causes.
In this study we calculated the private costs, marginal external costs, and degree of internalization for all modes for the period 2000-2014, with an outlook towards 2016. Based on these calculations we assessed the evolution of the degree of internalization over time. Is Flanders heading towards the “polluter pays principle”?  Which steps are needed to evolve to a better pricing?

To what extent does the transport user internalize their external costs? (see attach for the full report)

Period

2016

Client

Vlaamse Milieumaatschappij (Flemish Environmental Agency) - MIRA

Our team

Eef Delhaye, Sven Maerivoet, Filip Vanhove
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