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TU Dresden study on external costs of automotive transportation in Europe calls for internalization of the high external costs; raising user prices to change behavior

Average external costs from cars per 1,000 vkm by country. Click to enlarge.

A recent study from Technische Universität Dresden (TU Dresden) commissioned by the Greens/European Free Allianace (EFA) in the European Parliament concluded that the cars used within the EU-27 externalize up to about €373 billion (US$493 billion) per year (high estimate) of costs on to other people, other regions and other generations. The low estimate is external costs of €258 billion (US$341 billion).

The study focused on the larger environmental costs of car traffic (plus accident costs not covered by insurance)—i.e., air pollution; noise, upstream and downstream effects (covering all effects before and after the actual trip is performed); smaller other effects (land use, separational effects etc.); and climate change (focused on avoidance costs rather than damage costs). Neither infrastructure costs (area purchase, construction, maintenance, demolition, administration of infrastructure) nor congestion costs were included.

Costs for nature and landscape (water and soil pollution, resealing of land, habitat fragmentation and restoration, scenic beauty, biodiversity, etc.) were covered under “smaller other costs”, as were costs due to fragmentation of space and land use costs.

“Of course, the selection of any value for climate change costs is somewhat arbitrary. Given the uncertainties described above, however, we feel that these figures give an impression of the order of magnitude of the adaptation process in front of us. The results show that on one hand GHG emission reduction is not for free, but on the other it is also not impossible. The costs are in the same range as the costs for other effects.”
—“The True Costs of Automobility”

The magnitude of the external costs leads to a level of car use that is inefficient from the perspective of society, according to the study’s authors. Because “others” pay for large parts of the costs of transport, Europeans travel by car too much to enable an efficient situation, they concluded, noting that this also partly explains why there is a high level of congestion in parts of the EU.

The report analyzed the external costs of car use within the EU-27 by evaluating the existing literature in the field and developing a database from these figures.

Among their other conclusions, the authors suggested that the frequent claim “that cars cover all their internal and external costs” cannot be sustained. The study did not make a detailed estimation of charges and earmarked taxes of cars attributable to external costs; however, the authors said that it is “obvious” that a sum in the range of €300 to 400 billion of earmarked funds against these costs cannot be reached.

On the contrary; it must be stated that car traffic in the EU is highly subsidized by other people and other regions and will be by future generations: residents along an arterial road; taxpayers; elderly people who do not own cars; neighbouring countries; and children, grandchildren and all future generations subsidize today’s traffic. They have to pay, or will have to pay, part of the bill.

These findings suggest that political action is urgently needed. The sooner this happens, the more the transition process can be designed in a smooth, efficient, socially acceptable and environmentally friendly manner. The longer that action is delayed, the stricter, more severe and more expensive this process will be.

—“The True Costs of Automobility”

The authors also suggested that economic price settings and regulatory measures, framework settings and (land use) planning measures need at least as much political attention as technology. The least expensive option—and one that can change behavior substantially—might be to increase user price by internalizing the external costs in consumer prices, while offering alternatives to car use.

Reducing the total number of vehicle kilometres travelled has the greatest effect on greenhouse gas emissions, and there is no risk of recoupling effects. Technology measures such as biofuels or electric vehicles focus mostly on higher energy efficiencies and on reduction of greenhouse gases. Their effects on all other cost components of external costs are smaller. Noise and air pollution, as well as the large cost component of accidents, remain high, causing ongoing negative effects on society.

Many projections of avoidance curves are based on new technologies aimed only at achieving greenhouse gas emission reductions. The discussion about greenhouse gas reductions in transport is primarily left to automobile technology experts. This approach is misleading because other fields (like economic approaches or land use approaches or behavioural changes) are neglected; and these are fields in which reductions come at a much cheaper price.

The TransPoRD-project as a key research project on European greenhouse gas reduction measures in the transport sector concludes: “Technologies known today will not be sufficient to achieve GHG reduction targets of -60% to -80% by 2050”. Consequently, a combination of all possible approaches is needed: internalisation of external costs, pricing measures, technology development, land use changes, strong regulation (e.g. banning fossil fuel cars in certain regions after certain years). Modal split changes are needed to tackle the problem.

—“The True Costs of Automobility”




The German greens are getting so disgusted that they are considering moving out to Houston!


Let them come we'll fix it their stay won't last a day. We'll even give each one a free tin foil hat for the trip back to Germany.


Are the 'Greens' the only one with common sense?

In USA alone, cars and gun bullets kill over 30,000 people/year each and injure 10X as many. The total cost of all direct and indirect property damages, extra health care, lost working days, extra car insurance cost etc etc may be over $1T/year or than the cost of Irak Oil war but many times more deadly.

Kit P

“cars and gun bullets ”

Do not forget the hidden cost of bird watching and bowling.

The only people who take these people seriously are themselves. Things like electricity and POV powered by ICE are so popular because of the huge benefit. It is the 'let them eat crowd' who want to protect us from all the things they are unwilling give up.


lets remove their iPods and iphones made in sweat shops and see how they feel. the ice works and as spoon as they make a cost effective alternative i will be in line to but it. currently there isn't one. not one you can justify to a working class person who uses his car poorer truck to get to work or for work. one gallon of gas still contains several hundred percent more power than the best battery per pound. i pray someday that won't be true but face it, currently it is true.


Lets remove their iPods and iphones made in sweat shops and see how they feel. The ice works and as soon as they make a cost effective alternative I will be in line to buy it. Alas, currently there isn't one. Not one you can justify to a working class person who uses his car or truck to get to work or for work. One gallon of gas still contains several hundred percent more power than the best battery per pound. I pray someday that won't be true but face it, currently it is true. So making middle class people poorer is not the answer. Making a better solution is


I agree.
Everything should cost what it really costs.
Land use : tax agriculture equivalently for every square meter.
CO2 : that's the easy one. CO2 = CO2. Whether it comes from a car or home heating or electricity. It is equivalent to fuel use. Fuel taxes for cars are tremendously higher than fuel taxes on heating oil, coal, natural gas. CO2 is officialy traded at this moment (kyoto) for 6€/ton. 1 litre of fuel (after burning it's around 3 kg of CO2) is taxed at 1€. That means that gasoline is at this moment taxed at around 300€/ton, while the official price for industrial CO2 is 6€/ton.

Air pollution : let's tax older cars much higher than new cars (equivalent to sooth emissions).
accidents: that means mostly health-care costs. here also, lets equivalently tax increased costs due to chocolate, smoking, french fries, ski-accidents, soccer-injuries, horse accidents...

In addition, don't only mention external costs, but also external benefits. Car use has major benefits for economic growth, tourism industry, job flexibility...

Alternatives for cars (=public transport) are subsidized much more : If I want a car, I have to buy it 100% from my own money, while if I want to drive a train, the majority of the price is paid by public money.

On average I am quite confident that car drivers contribute much more to "national balance" than non-car-drivers.


If its truly that bad, the EU should just outright ban automobiles...

there is a reason we don't ride horses anymore

Alain I totally agree, make it same for same, levy taxes the same per ton of CO2 don't single out transportation. Just think of all the revenue that would bring in.

Kit P

“cars and gun bullets ”

Do not forget the hidden cost of bird watching and bowling.

The only people who take these people seriously are themselves. Things like electricity and POV powered by ICE are so popular because of the huge benefit. It is the 'let them eat crowd' who want to protect us from all the things they are unwilling give up.

“Everything should cost what it really costs. ”

Alain should pay what he thinks it costs. I should not have to pay a cost Alain makes up. Notice that Alain thinks only others should pay.

“Land use ”

Framers pay property taxes based on the value of their land.

“CO2 ”

The cost of CO2 is zero.

“Air pollution ”

We do not have air pollution where I live. The air quality index is 'good'. If fact you have to look real hard to find a place with air pollution in the US. For year I have been linking the EPA web site with real time air quality info. I never get back 'my' air quality is bad but just links to tin hat web sites.

“let's tax older cars ”

That right sock to poor people, got to keep them in their place. There is a reason that some Americans do not like old Europe and their solutions. Of course if you look at the flawed data, air pollution is a very small cost.

“increased costs due to chocolate ”

That is a new one. Can tell if Alain is using humor to make a point or had a disabling accident skiing while drink hot chocolate.

I suspect the only real data is the cost of accidents. In the US, drivers are required to carry insurance so the cost is part of the privilege of driving.


While we're at it why not tax breathing which generates CO2 and flatulence which generates CH4. Imagine what the Tin Foil Hat Spinach Party could do with this new income stream. All sort of crack pot ideas come to mind.


Kit P...add the very high cost of 1001 Junk Foods, specially sweet drinks and the latest 'so called' energy drinks. The 46% overweight Americans cost the nation and tax payers $$$$$B/year and may be responsible for a very high percentage of the national deficits.

Most of the remaining smokers (20+%) and the current overweight (46+%) are not mature enough or do not have the will power to overcome the 'tobacco and junk food' industries Ad campaigns.

It is been demonstrated that addressing the pocket book with much high taxes on damaging goods is one of the most effective way to help the addicted to tobacco, junk foods, bullet killing machines and muscle killer cars.


Even supporters of this type of analysis should wonder why there is no calculation of offsetting benefits, such as increased access to higher value (social and personal) work. If only the negatives are considered, then everything--cars, children, hospitals, newspapers--should be subjected to massive offsetting taxes.

Kit P

Harvey is missing the point.

“It is been demonstrated ”

The only thing that has been demonstrated is that people who have an agenda will think of some silly reason to tax something.

Clearly people addicted to drugs, ethanol and a lesser degree nicotine will continue to damage themselves regardless of cost. For those who missed it, these things are either illegal or heavily taxed.

While it is sad to watch destructive behavior by those that do not take personal responsibility for their actions; thinking that government dictating morality will work is absurd.


KitP all depends where you come from. In a countries where the $$$$ is about all that matters, people will response the most to a squeeze on their pocket book. It worked with about 50+% of smokers in Canada and USA. Bans had to be used for the other 30% and the remaining 20% may be hopeless?

The same, similar or adapted medicine may work with other addictions such as 1001 junk foods, dangerous driving, bullet killing, embezzling speculators, black mailing lawyers etc.

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