RAC - News Archives

back to previous page

February 24, 2003	RAC News
Take the train, please: POLICY IN MOTION
Globe and Mail Monday, February 24, 2003 - Page A11 Tomorrow, Transportation Minister David Collenette will unveil his Transportation Blueprint; we eagerly await signs that Canada is paying close attention to major U-turns in transportation policy from the other side of the Atlantic. London has just launched an enlightened experiment to charge for traffic congestion. And in Paris, the traditionally conservative Organization for Economic Co-operation and Development has published a key study on surface transportation policy. The OECD isn't often associated with "green" thinking. On the contrary, this global think tank embraces orthodox, laissez-faire policies that make economic growth an article of faith. So the OECD's conversion to concern over the financial and environmental sustainability of transportation policy is striking. Its 2002 report, Policy Instruments for Achieving Environmentally Sustainable Transport, provides a stark assessment of the full social costs of surface transportation systems. It considers the true price of transport to include all costs stemming from the supply of infrastructure (investment, operation, maintenance) and its use during transport activities. Private costs are partly covered by the price of the product (e.g. the car and its fuel). External costs include air and water pollution, noise, accidents, congestion and junked machinery. They also include the disruption of communities and ecosystems by infrastructure and traffic flows, altered land use, and the aesthetic impacts of all of these. External costs, often hidden, are unfairly passed on -- to society, taxpayers, adjacent residents and landowners, to people who don't own or use private cars, and the natural ecosystem. The OECD says, "A fair market for transport services requires that the prices of transport include all social costs, i.e. both private and external costs" and that they be transparent to consumers (users) and producers. Failure to make these costs transparent will distort the market system. The report adds, "non-internalization of the external costs in the transport sector can . . . lead to inefficiencies in the form of congestion, lack of safety, and health and environmental impacts." Even a casual observer would see such problems in and around Canada's major cities and highways. They're the costs governments aren't taking into consideration. Drivers only need to think about their own marginal costs -- parking and gas. Street repair, road maintenance, ambulances and traffic lights are experienced as free goods. As a result, discretionary personal car use by Canadians has soared. Ottawa predicts that car use will be 50-per-cent to 60-per-cent higher in 2015 than in 2000. Worse, more and more drivers are single-occupant vehicle (SOV) commuters driving sport utility vehicles. Commercial trucking's market share has also increased markedly -- due, in part, to the failure to apportion most of the costs cited above. Trucking activity has more than doubled in the past decade, with an annual average growth rate of 11 per cent. Just in terms of infrastructure cost recovery (and not counting environmental remediation, congestion or accident costs), the U.S. Department of Transportation estimates that loaded tractor-trailers in excess of 100,000 pounds pay only 40 per cent of their road-impact costs. Clearly, governments are heavily subsidizing private motorists and intercity trucking, and are indifferent to the resulting market imbalances. The OECD sketches two conservative scenarios. One is a business-as-usual scenario in which no effort is made to address the highly energy-intensive way we currently move people and freight. The other is an environmentally sustainable transport scenario in which a variety of public policy instruments and incentives are used to lessen reliance on energy-intensive, polluting modes. Both scenarios are rolled out to 2015 and applied to the nine countries (including Canada) that participated in the study. Under business as usual, the total cost of surface transport in the nine countries is $472-billion in 2015. With environmentally sustainable transport, the OECD estimates the cost would diminish to $223-billion by 2015. On a per capita basis, the first scenario generates a charge of $1,728 for every one of the 273 million inhabitants of the nine countries surveyed. The environmental scenario reduces that per person charge to $816. Without a user-pay system based on true external costs, we all pay -- through increases in taxes, health-care costs, increased congestion and so on. (When the OECD data is broken down by mode, it finds that car travel is 54 per cent of business-as-usual costs in 2015; light-duty and intercity trucks are 33 per cent; rail/intermodal freight is 2 per cent.) Traditionally, governments have argued that external costs are hard to quantify. That's changing. London is capturing some of the cost attributed to inner-city vehicle use by introducing a congestion charge of £5 ($12.26 Cdn.) per day. Other cities -- Singapore, Melbourne, Bergen, Oslo and Trondheim -- are pioneering such means as weight-distance charges and emissions charges to rein in the excess demand that prevails when public goods are underpriced. The OECD report states that if we are to achieve environmentally sustainable transportation systems, we must learn to do things differently. And "the most conspicuous differences will concern the use of rail tracks rather than roads, particularly for freight movement but also for the movement of people." We believe governments can take all kinds of measures to lower external costs. They can establish stricter land-use controls with growth boundaries and minimum densities; reduce intercity speeds; provide tax incentives for privately run railways; and require environmental assessment of new develop- ments. Some of these measures apportion the cost directly to the user and are by nature coercive, such as road tolls. Others help reduce external costs simply by encouraging behavioural change, such as walking to school. We urge Canadian governments at all levels to examine the OECD's analysis, do the math, and stop underwriting Canada's descent into the pit of highway spending and environmental degradation. Chris Jones is director of government relations at the Railway Association of Canada. Robert Taylor is the RAC's executive director of policy development and economic research.
Contact Information: Robert Taylor Executive Director, Policy Development and Economic Research Railway Association of Canada Chris Jones Director, Federal/Provincial Government Liaison Railway Association of Canada


	Railway Association of Canada 99 Bank Street, Suite 901 Ottawa, ON K1P 6B9 Telephone: (613) 567-8591 Fax: (613) 567-6726


	Mr. Paul Goyette Director, Communications and Public Affairs Phone: (613) 564-8097