The External Costs of Road Transport

The external costs of growing road traffic volumes include congestion, greenhouse gas emissions, accidents, social exclusion, health, etc. On a per kilometre travelled basis, these external costs are highest in our capital and major cities. If road users were confronted with all the costs that their travel choices impose on the wider community there would be little reason to be concerned about road traffic growth. If the will to tackle urban road pricing is lacking, vehicle kilometres of motor vehicle travel (or VKT) is the single most powerful indicator of whether an urban land transport system is becoming more or less sustainable long term

Policy goals:

1. Greater origin-destination proximity.

• ·      If travel speeds are improved, such as by the construction of a new road, people tend to travel further, converting savings in travel time into greater travel distances, maintaining their travel time budgets. 
•       research by Duranton and Taylor (2009) shows that major urban road improvements tend to generate additional traffic almost in the same proportion as the relative expansion in the asset base – it is no surprise, then, that new or expanded freeways fill rather quickly.

2. Urban congestion costs can be cut by over 40 per cent if congestion pricing reduces urban traffic volumes by about 4 per cent.

•      The steep slope of the congestion cost curve at high volume/capacity ratios has been shown, in recent European research, to frequently lead to overestimation of congestion reduction benefits from planned road improvements (Nicolaisen and Næss 2015). Congestion tends to discourage traffic in the ‘do-nothing’ situation, damping down prospective user benefits from improvement. This analysis is a good reason for requiring, as Infrastructure Australia has done (IA 2013), that major road projects be evaluated as if congestion pricing was in place.

3. An 80 per cent emission-reduction target for 2050 should be embedded in national legislation and that the land transport sector should be expected to achieve a reduction of this broad order.

•      The implication is for a much stronger push towards more compact cities, with high quality public transport systems, and setting time-lines for substantial reduction in vehicle emissions intensity

o   this would require new motor vehicles to be virtually emission-free by 2035

o   a 10 per cent cut in car VKT travelled in our cities, against current levels

o   the mode share for urban trips that is provided by walking, cycling and public transport increasing from about 24 per cent in 2007 (across capital cities) to about 45 per cent (if car VKT increase, then this mode share needs to increase as an offset)

o   Car occupancy rates increasing by about 0.3 persons (from 1.4 to 1.7 across cities)

o   Road freight productivity increasing by about 30 per cent.

 Source: John Stanley and Dr Peter Brain, ‘Sustainable Urban Mobility: Economic Perspectives’. Report prepared for ACOLA. February, 2015.