Sustainable transport: Infrastructure costs and the relevance of externalities.

Abstract

Paper presented at the 32nd Annual Southern African Transport Conference 8-11 July 2013 "Transport and Sustainable Infrastructure", CSIR International Convention Centre, Pretoria, South Africa.

Long term sustainable transport, including infrastructure costs and recovery, as well as associated externalities, has become an increasing concern in recent years due to social and environmental issues. This paper considers infrastructure provision costs and the significance of the so-called ‘hidden costs’ which can benefit one transport mode at the expense of another and lead to inefficient transport pricing. It is important to consider the cost and value of each transport mode in terms of long-term sustainability, energy efficiency and environmental issues. Finally, consideration must be given to service quality to the user – whether in the private or in the commercial world. Many of the costs of providing freight and passenger road and rail transport services have been externalised in the past and passed on to the public in general – including non-users of transport. This should be seen as a de-facto form of cross-subsidisation which can lead to decisions being made for infrastructure investments which may seem appropriate in the immediate short term, but which may have negative effects in the long term. Infrastructure costs include the cost of providing railways and the public transport infrastructure of roads, both rural and urban, as well as the ways of redeeming these costs from users. Fair infrastructure charging principles must be applied which consider the following points: · The capital cost the rail system, as well as road infrastructure development and the overall costs to the economy in general; · The contribution to pavement wear and tear costs by various users, and · Space occupation and other infrastructure facilities for specific users. In addition, transport cost externalities must also be considered and they include: · Accident costs; · Congestion costs; · Exhaust emission and pollution costs including Greenhouse and carbon issues; · Noise costs; · Traffic policing costs, and · Energy efficiency and resource consumption. Consideration is given to these issues and their relevance to South African conditions in this study. Background details relating to earlier studies which have appeared are included since many are not well known. Extracts from these reports support many of the conclusions drawn in this paper. It is important to note that quantification of some external costs has been difficult and controversial in the past but more sophisticated scientific evaluation is advancing such work at a rapid rate. It is also important to appreciate the fact that internalising some of these costs may not be considered ‘politically correct’ or justifiable but it is important to be aware of the consequences of these costs – broadly and across society in general.