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Strategic transport: QUITS: Quality indicators for transport systems
Land transport (road, rail)
Environmental research

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EUROPEAN
COMMISSION TRANSPORT RESEARCH
FOURTH FRAMEWORK
PROGRAMME
STRATEGIC TRANSPORT
VII — 70
Quality indicators for transport systems
QUITS
ISIS — ENEA — Inestene — ZEW — ISI-Fraunhofer ■
WHO-ECEH The information contained in this publication does not necessarily reflect either the position or
the views of the European Commission.
A great deal of additional information on the European Union is available on the Internet.
It can be accessed through the Europa server (http://europa.eu.int).
Cataloguing data can be found at the end of this publication.
Luxembourg: Office for Official Publications of the European Communities, 1998
ISBN 92-827-4035-8
© European Communities, 1998
Printed in Belgium TABLE OF CONTENTS
0. EXECUTIVE SUMMARY 1
1. GENERAL PRESENTATION OF THE QUITS PROJECT 2
1.1. Background and general objectives
1.2. Methodological approach 2
1.3. Internal quality valuation 3
1.4. Externalyn 4
1.5. Validation 5
1.6. Towards an integrated valuation methodology
2. INTERNAL QUALITY VALUATION 11
2.1. Passenger transport
2.1.1. Valuation of travel time in passenger transport
2.1.2. Assessment of direct (user) costs in passenger transport 19
2.2. Goods transport 22
2.2.1. General approach
2.2.2. Route representation
2.2.3. Practical application3
3. EXTERNAL QUALITY VALUATION6
3.1. Introduction
3.2. General Framework for the Valuation of Transport Externalities 2
3.2.1. External costs of transport
3.2.2. QUITS relevance to transport pricing policies 29
3.2.3. Compensation concepts and valuation methods 30
3.2.4. Valuation of health risks due to air pollutants and accidents 31
3.2.5.n of global warming 32
3.2.6. Valuation of noise nuisance4
3.2.7. Review of major studies on external costs of transport6
3.3. Measuring Environmental and Health Impacts of Transport Systems 4
3.3.1. Overall approach 40
3.3.2. An integrated model for the external cost analysis of interurban road traffic... 4
3.3.3. Dispersion and impact modelling for rail and air traffic 4
3.3.4. Noise7
3.3.5. Accidents8
3.3.6. Other burdens9
3.3.7. Calculation scheme for specific external costs 52
4. VALIDATION ON SELECTED INTER-URBAN ROUTES 54
4.1. Results for the Route Frankfurt-Milan
4.1.1. Internal quality 5
4.1.2. Externaly 6
4.2. Results for the Route Lille-London 7
4.2.1. Internal quality4
4.2.2. Externaly 80
4.3. Results for the Route Munich-Patras3
in 4.3.1. Internal quality 83
4.3.2. Externaly7
5. CONCLUSIONS AND RECOMMENDATIONS 91
5.1. General remarks 9
5.2. Suggestions for further work2
5.2.1. The need for further validation case studies
5.2.2. Generalisation and extension of the QUITS methodology 9
5.2.3. Value of Time
5.2.4. Data requirements
5.2.5. Application to urban transport4
5.3. Recommendations on the use of the QUITS methodology and software 9
5.3.1. The meaningfulness of the quality indicators 9
5.3.2. Interaction with other research5
5.3.3. The QUITS software
REFERENCES 96
IV 0. EXECUTIVE SUMMARY.
The objective of QUITS is to improve decision-making in the transport sector by comparing
the quality of modal alternatives available on individual inter-urban routes. The investigation is
based on the main assumption that the quality of a transport system depends on both internal
(direct costs, travel time) and external (environmental, social and other external costs)
variables. QUITS covers all transport modes and deals with both passengers and goods
transport.
Over the 18 months of the project lifetime, QUITS has therefore: i) identified a set of
indicators allowing to measure the performance of transport systems on inter-urban routes, ii)
designed a consistent methodological framework for the application of these indicators to
individual transport corridors, ¡ii) developed software for its practical implementation, and iv)
validated this methodology on three European routes.
Chapter 1 describes the general framework of quality measurement. It defines the main
variables to be considered, and their role in the bottom-up process of quantification of both
internal and external performances. The limits of the general framework are identified, mainly
in relation to the availability of appropriate systematic data and the reliability of the monetary
valuation techniques used.
Chapter 2 illustrates in more detail the valuation methodology for the internal quality of
inter-urban transport systems. The crucial role of travel time is explained, together with the
associated measurement procedures. Direct costs borne by the user, as well as total internal
costs (i.e. including the value of travel time) are then analysed, and the corresponding sequence
of calculations is described.
Similarly, Chapter 3 deals with external quality valuation. It first assesses the scope of
transport externalities, and their relevance to the current debate on pricing policies. The main
external costs are then identified and individually analysed (polluting emissions, noise,
accidents and their impact on environment, health and climate changes), in particular through
the use of an innovative suite of modelling tools allowing to estimate the changes in nuisance
concentrations resulting form the dispersion of pollutant emissions. The quantification of
external costs in monetary terms is then illustrated through the practical application of the most
appropriate valuation techniques, including direct and indirect methods.
Chapter 4 is devoted to the presentation of results obtained from the application of the
QUITS methodology to three European inter-urban routes, i.e. Milan-Frankfurt, London-Lille
and Munich-Patras.
For each of those corridors, and for all the transport modes available therein, both physical
and monetary indicators are measured, allowing to compare the performances of modal
alternatives at the internal and external level. Numerical results are extensively shown in a
series of tables and graphs, also including direct outputs from the original QUITS software for
internal quality measurement. External costs of passenger road traffic are found to be 9 times as
high as those of rail traffic (11 times for goods) and about twice as high as those of air traffic.
Finally, Chapter 5 outlines the main conclusions and recommendations, with particular
attention to the need for additional, bottom-up validation activities, in view of a possible
generalisation of the use of the QUITS toolbox at the European level and beyond. 1. GENERAL PRESENTATION OF THE QUITS PROJECT
1.1. BACKGROUND AND GENERAL OBJECTIVES
The objective of the QUITS project is to develop a methodology which will improve decision­
making in the transport sector by drawing attention to the internal and external quality
dimensions. The investigation is based on the main assumption that the quality of a transport
system depends on both internal and external variables.
Externalities are changes of welfare which are caused by economic activities without being
reflected in market prices. External costs are negative externalities which occur when transport
consumers/producers impose higher costs on society than they bear themselves. The concept of
Oexternalities has been well established in neo-classical economic theory since an article of
Arthur Pigou in 1912. From the point of view of many economists, the explanation for the
environmental problems of our society can be provided by this concept of externalities which is
a component of the neo-classical theory of welfare economics. The answer given by this theory
to e.g. the question of how to prevent environmental degradation is the internalisation of
environmental costs through various mechanisms, as for instance through taxes or tradable
permits. Internalising external effects means getting the prices 'right', so that environmental
concerns can be taken into consideration and, thus, incorporated into public and private
decision making.
On the other hand, for what concerns the analysis of the internal quality of a transport system,
consistently with most of the studies developed so far, the attention is here focused on two
macro-aspects, respectively travel time and direct costs.
1.2. METHODOLOGICAL APPROACH
Based on the detailed analysis of these three areas of interest (travel time, direct costs,
externalities), a comprehensive valuation framework of the global quality of the transport
system has been established; owing to the need of homogeneity of the units of measure, the
result of such ae valuation has been expressed in the form of a "total cost of the
travel", which is nothing but the straightforward sum of the costs of:
• travel time (or value of the travel time)
• direct costs, and
• external costs.
Figure 1.1 below represents in a very general way this global quality valuation framework,
based on the definition, measurement and comparison of the total travel costs by several
transport modes (road, rail, air, ship) on specific selected routes. Figure 1.1 Global quality evaluation framework
TOTAL TRAVEL
DIRECT EXTERNAL
+ TRAVEL TIME + = COSTS COSTS
COST VALUE
1 I
INTERNAL COSTS
Reaching the final objective of the complete valuation of a transport system requires a
sequence of previous stages and particularly, for what concerns a more accurate valuation of
internal quality, the determination and the monétisation of the travel time.
The methodology applied to the entire QUITS project is based on a "bottom-up" approach, that
is to say that, starting from a high level of disaggregation of the inputs, it then reaches the
desired output by way of successive aggregations. Consistently, the methodology is being
tested on a set of three specific routes, selected on the basis of features of transnationality and
¡ntermodality (namely Lille-London, Milan-Frankfurt, Munich-Patras), for which
disaggregated data are collected accordingly.
1.3. INTERNAL QUALITY VALUATION
The sequence of steps for the calculation of travel time initiates with a survey of expected
travel times for each mode (i.e. scheduled travel times for rail and air transport, expected travel
time for highway). It then proceeds to consider all the issues and events which in reality
contribute to the determination of actual travel time.
Those can be roughly classified into:
• Frequencies of the scheduled departures;
• Accessibility to the different transport modes;
• Congestion and delays.
Once travel time is known, both globally and broken down into its sub-components (pure travel
time, disposition time, access/egress time, wait/search time), QUITS proceeds to its monetary
valuation. This is carried out through:
• the use of travel time values differentiated according to travel purpose (i.e. business or
leisure) and
• a separate calculation for each of the pre-defined sub-components of travel time.
It is then possible to derive the value of travel time, which is in fact the first step (box) for the
calculation outlined in the figure above.
The bottom-up approach also applies to the calculation of direct costs. Based on the same
disaggregation of travel time in sub-components, the QUITS methodology proceeds with the
calculation of direct costs associated to each transport mode, i.e. air and rail fares, fuel and car
use costs, highway tolls, the costs of the urban public transport and taxi fares.
As a result, the second component of internal costs as defined above can be derived, therefore
allowing a further step (box) in the overall valuation exercise summarised in the figure above. 1.4. EXTERNAL QUALITY VALUATION
With regard to the external costs of transport, an ongoing debate discusses the question
whether external benefits have to be considered in valuation studies. Some studies have tried to
identify specific external benefits of transport, like regional development effects or productivity
benefits (Aberle 1995, ρ 6 Iff). However, a critical review of these studies shows that nearly all s of transport services have to be paid by the users, i.e. the benefits are internal, i.e.
included in market prices.
The Greenbook of the EU-Commission "Fair and efficient pricing in transport" (Kinnock-
Report) (1995) includes environmental and non-environmental effects like congestion.
According to the Greenbook, congestion is responsible for a major part of the total external
costs. Contrary to that, some other external cost studies do not consider the congestion problem
at all. The different handling of congestion in the literature can be explained by different
perspectives and interests of research. Studies considering congestion costs take the perspective
of a single individual and identify e.g. time losses being caused by a first individual and paid by
a second one. Studies leaving out congestion costs look at the traffic system as a whole and,
since both individuals are part of the traffic sector, do not identify an external effect between
the traffic sector and other systems. The conclusion - which is particularly applicable to non-
urban transport - is that congestion induces external costs between individuals, but not between
thet system and other systems. Hence, from the perspective of the QUITS-project,
congestion is part of internal quality of the transport system, while the analysis of external
quality focuses mainly on the analysis of effects on third parties not being part of the transport
system (e.g. ecological effects, state aids).
QUITS considers the following external costs of transport:
• air pollution,
• climate change,
• traffic noise,
• accidents (as far as they are not internalised by insurance premiums),
• transport infrastructure costs (as far as they are not covered by charges) and
• subsidies fore use.
For infrastructure costs and subsidies only a qualitative investigation was made giving some
examples due to the lack of route-specific data.
A major problem is the selection of the appropriate externalities valuation method. A meta­
analysis of existing studies on external costs of transport shows that monetary values differ
substantially depending on the approach chosen. Thus, the aim of QUITS is to make the
assumptions of the different approaches transparent and to improve the external cost
methodology. A uniform methodology for calculating external costs of transport for different
types of impacts, transport modes and traffic routes for selected European countries is applied.
In the field of the external costs of transport systems, some valuation attempts have already
been made, but no study is available which is comparable to the work made on energy
externalities, e.g. in the study „External Costs of Fuel Cycles" (ExternE) commissioned by the
European Commission (DG XII). The valuation of external costs within QUITS is based on the
ExternE methodology, especially with regard to the bottom up-approach, the calculation of
marginal costs and the air pollutants included. The current third phase of the ExternE-project is
extending the bottom-up approach of the overall methodology to the use of energy in the
transport sector. For that reason, exchange of information and cooperation with the ExternE-
team was helpful and stimulating for the project.