In this series of climate and environment blogs, I want to talk about transportation and the externalities that come with it. But first of all, what are transportation externalities? When we commute to and from work, take coaches for short travels or even fly in planes, we are usually expecting that some sort of cost associated with each ride. Such direct monetary cost can be in the form of the money we pay for fuel burnt in our cars, bus fare, or perhaps air tickets.

However, none of these costs (very few of them, to be precise) has accounted for the negative impacts for the society and our own well-beings that happened during the travel (Holcombe & Williams, 2010). Whichever method of travel should we choose, we have not simply asked the gas station to replenish spent fuel, the bus driver or the airway to provide their service. All such “human service”, thanks to the sophisticated modern business, have been properly priced and included in the aforementioned travel “cost”. On the other hand, while we travel, our means of transportation burns whatever fuel it consumes (or the resources to generate electricity for electric vehicles), it also produces unwanted articulates, chemicals (such as NOx), and especially green house gas (such as CO2, the most notorious villain in these days) in considerable amounts (fig. 1).

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Fig. 1 Negative externalities associated with freight transportation, from Demir et al. (2015)

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In order to deal with all these unwanted by-products of our travel, our mother nature will have to perform ECOLOGICAL SERVICE (Parry & Timilsina, 2015), absorbing excessive CO2 with peatland, ocean and trees, capturing aerosol and particulates, reducing noise pollution, and even relaxing our eyesore. Yet none of such crucial services have been given a price tag and accounted for while we check out at gas stations or pay for air tickets for Christmas Holiday travels.
All such un-priced (and therefore usually unpaid-for) services, in general, are given the name “externality”, meaning “outside (external) of market”. For most economists, the term “negative externalities” (sometimes just referred to as externalities) include all the negative effects of a transaction that has not been included in the monetary price (Anas & Lindsey, 2011). In the scope of this blog, however, we mainly examine environmental externalities (Demir et al., 2015). Given that green house gas and pollution emissions from transportation activities is one of the most tangible and significant pollution source known to most people, I figure that it is necessary to educate readers of all backgrounds about the sheer scale of unaccounted-for transportation externalities, both for moving people and cargo, and therefore this series of blogs.
A non-comprehensive survey of related literature yields fruitful findings on studies surrounding transportation externalities. Although most studies focus on reducing externalities directly related to drivers and passengers, e.g. reducing congestion time and commute distance, controlling direct pollution from fuel burning, etc. (Timilsina & Dulal, 2011), increased attention have been given to long-term climate and environment externalities associated with transportation (Jeusset et al., 2016). While controlling green house gas emission is definitely the spotlight topic, it is not negligible that researchers also care about other environmental externalities such as severing of animal habitats, land use and albedo (the rate at which land cover reflects solar radiation) change, and transportation hazard associated with environmental change, such as increased coastal erosion.
On the policy side, however, actions are few and far between worldwide (Timilsina & Dulal, 2011; Parry & Timilsina, 2015). Existing policy tools and control measures mostly focus on controlling (1) usage of private vehicles, and (2) total ownership of private vehicles, with an aim of easing urban congestion and pollution, while also reducing urban heat island effect. Common policies include lottery system for private vehicle purchase, and urban traffic toll, etc. Although these policies technically do reduce environmental pollution and green house gas emissions, they have not been specifically designed for such purposes. With larger economies such as the U.S. and China witnessing increased ownership in private electric vehicles and China implementing regional policies demanding for pure-electric public transportation, it is likely that more policies specifically aiming at reducing environmental externalities of transportation may be implemented.
Following the introduction on externalities, this blog shall proceed to talk about transportation on the road, rail, air, and externalities involving life cycle analysis of means of transportation. Every method of movement incurs its own pros and cons, yet I am not here to banish any kind of transportation method: we are going to explore the means by which we can internalize outstanding externalities, so that they can be properly priced. Stay tuned!

 

References
Anas, A., & Lindsey, R. (2011). Reducing Urban Road Transportation Externalities: Road Pricing in Theory and in Practice. Review of Environmental Economics and Policy, 5(1), 66–88. https://doi.org/10.1093/reep/req019
Demir, E., Huang, Y., Scholts, S., & Van Woensel, T. (2015). A selected review on the negative externalities of the freight transportation: Modeling and pricing. Transportation Research Part E: Logistics and Transportation Review, 77, 95–114. https://doi.org/10.1016/j.tre.2015.02.020
Holcombe, R. G., & Williams, D. W. (2010). Urban Sprawl and Transportation Externalities. The Review of Regional Studies, 40(3), 257–272.
Jeusset, A., Vargac, M., Bertheau, Y., Coulon, A., Deniaud, N., Lachapelle, F. F. D., et al. (2016). Can linear transportation infrastructure verges constitute a habitat and/or a corridor for biodiversity in temperate landscapes? A systematic review protocol. Environmental Evidence, 5. http://dx.doi.org.libproxy.ucl.ac.uk/10.1186/s13750-016-0056-9
Parry, I. W. H., & Timilsina, G. R. (2015). Demand-Side Instruments to Reduce Road Transportation Externalities in the Greater Cairo Metropolitan Area. International Journal of Sustainable Transportation, 9(3), 203–216. https://doi.org/10.1080/15568318.2012.755581
Timilsina, G. R., & Dulal, H. B. (2011). Urban Road Transportation Externalities: Costs and Choice of Policy Instruments. The World Bank Research Observer, 26(1), 162–191.