External costs and benefits of transport

Transport and mobility result in a range of costs and benefits. Some of these are felt directly by transport users: the costs of petrol or a rail ticket, or the benefit of getting to work conveniently by car or train. By paying for fuel or a ticket, transport users assume a share of the costs that they cause. There are other costs, however. Although these are caused by mobility, they are not reflected in its price. These are known as external costs, and they are environmental and accident and health-related in nature. These costs are borne by third parties, by the general public, or by future generations.

A wide range of scientific disciplines is involved in determining transport-related damages and costs. For example, we know from medical studies how exhaust fumes and noise affect human health. From this, the nature and severity of the illness triggered by transport can be established. Expertise in environmental science is also needed, to quantify the negative impacts of pollutants or transport infrastructures on plant and animal species. Finally, the effects determined in this way must be quantified in monetary terms. A metric known as the ‘value of statistical life’, or VOSL, is an important factor when placing a financial value on damage to health. It expresses how much a society is willing to pay to prevent a death.

External benefits are the counterpoint to external costs. Certain mobility behaviours generate a benefit that extends beyond the personal benefit to the transport user concerned. This is particularly true of walking, where physical activity generates benefits to health which then have a positive effect on society as a whole: less illness and thus more productive workers, as well as lower healthcare and social security costs.

For optimum resource allocation within an economy, external costs and benefits should be internalised. In other words, they must be charged or credited to those who produce them.

Mobility generates other significant costs and benefits for society.

  • With the exception of the benefits to health mentioned above, in most cases the benefits are felt directly by transport users, and are thus not classified as external. The Federal Office for Spatial Development ARE and Federal Roads Office FEDRO published a comprehensive study on this field in 2006.
  • The costs of mobility, and the way in which they are financed, are presented in detail in the publication of the Federal Statistical Office entitled Kosten und Finanzierung des Verkehrs (‘The costs and financing of transport’). The ‘Costs and financing of transport’ publication draws on its calculations of external costs and benefits.

Congestion costs

Congestion costs, and in particular the cost of the time which users of motorised road transport cause each other to lose in traffic jams, is also relevant at the macroeconomic level. These costs quantify the loss of time that is actually suffered. In addition, congestion causes environmental, climate, energy and accident-related costs. These are already factored in to the calculations of external costs referred to above. Aggregate congestion costs are calculated and published periodically by the ARE. A more efficient use of transport infrastructures and thus better capacity utilisation, by means of various measures to even out peaks in traffic volumes, might help to reduce these considerable costs to the Swiss economy.


Federal Office for Spatial Development

Joséphine Leuba

+41 584 84 98 82

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