9. Policy instruments in the transport sector
> Difficulties Arising from Differences in Member States’ Situations The further away countries are from the EU’s centre of gravity, the more they insist on low fuel prices and transport tariffs to avoid being disadvantaged. On the contrary, countries confronted with transport bottlenecks ask for a tariff-based taking in charge to cover their infrastructure expenditures. They also support a reduction in traffic volumes (e.g. routes crossing the Alps and Pyrenees). Until now, this situation has obstructed any possible rises in transport tariffs, even in order to simply reflect the negative social and environmental externalities. Peripheral EU countries must therefore be compensated for the necessary rise in transport costs by, for example, support for the building of certain items of infrastructure.
> The Necessity to Internalize Social and Environmental Costs and the Generalization of Calculation Methods for Overall Costs in the Transport Sector The first step consists of coming to an agreement on the general principles of accounting practices to be adopted in order to allow for social and environmental costs to be accurately reflected in prices. So long as these costs are not seriously internalized, current accounting practices will remain both dishonest and unserious, and the distortion of competition will continue. To adequately compare the various options in the transport choices of individuals and companies, a decision must be made at the European level, and subsequently at national and local levels, to evaluate the overall costs of transport and to price transport to reflect all direct and indirect costs, i.e. from “well-to-wheel” after an analysis of the life cycle. This internalization requires the following elements: agreement on social and environmental costs of each mode, according to their context, based on serious expert research;
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agreement on the social rules applied by every country, most specifically in road freight transport; determining tariffs on transports based on their overall costs; putting a price on carbon and raising it progressively in coming years; agreement on baseline scenarios for the evolution of energy prices in coming years; such baseline scenarios produced with experts should be regularly revised.
> The Limitations of Internalisation and the Price Effect Internalisation Is a Vital Measure in the Elimination of Economic Distortions Internalisation means we can include, in the price of transport, the costs associated with it.Up to now these costs have been borne by the local authorities (or individuals). Doing this, sooner or later, will place the citizens once again in the shoes of economic players in a situation where they must make choices. It implies so that the citizens have the information necessary to identify where their interest and the common interest lie.8 An optimal internalisation consequently leads to the application of the principles of polluter pays and user pays (concerning the wear and tear on infrastructure, their management and their renovation). Nevertheless, this optimization is very difficult to operate while the values attributed to social and environmental externalities are so difficult to comprehend. What is the price of a human life? Besides, we cannot expect that a fair internalisation of external costs will be enough to reorient transport policy. Indeed, the usual added value of internalisation, gauged by the studies made in that field, are relatively modest. To follow this reasoning, we have to add the overheads that correspond to anticipations of costs (evolutions in the price of energy, worsening impacts of climate change, the value of carbon). The calculation of such values is even more subjective, in particular those concerning climate change, taking into account the current weak price of carbon.
8 The Commission adopted in 2008 a document defining the methodological basis for strategies for the internalisation of external costs.