The transport sector provides an example of economic activities that are detrimental not only to their initiator but to uninvolved third parties. Such additional social costs show a marked disparity between private and social net products. Attempts to quantify external effects have found indirect preventative measures a more practical method of estimation than direct measurements. The author divides risks into those capable of compensation, e.g. reduced returns and those incapable of compensation, e.g. loss of life, disturbance of atmospheric or ecological equilibria. The social costs calculated can be grouped with other transport cost components as a basis for taxes and regulations which will have the aim of encouraging a reduction in social costs. Accident and environmental costs form the bulk of additional social cost and both areas are examined in detail. Safety and environment are then treated as scarce goods and economic criteria applied to them using four approaches: resource, utility, prevention and risk. The different methods are compared and figures given for some cost calculations made by other authors. The possibilities for transport measures to reduce social costs are outlined including methods of risk management and economic incentives. The author concludes that it is possible to quantify additional social costs but that EC policies at present take no account of this.
Abstract