Report on “external” costs of electricity and transport released by EC

11 September 2003

The European Commission has released a research report titled “External Costs: Research results on socio-environmental damages due to electricity and transport”. The report—prepared by the ExternE (External costs of Energy) European Research Network—attempts to quantify the full socio-environmental cost of different methods of transport and electricity generation. The ExternE study results could provide a guidance to impose eco-taxes on the most damaging fuels and technologies or to encourage those with lower socio-environmental costs.

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Socio-environmental, or “external”, costs from activities such as electricity generation are said to arise when “the social or economic activities of one group of persons have an impact on another group and when that impact is not fully accounted, or compensated for, by the first group”. Seven major types of damages have been considered, the main categories being human health (fatal and non-fatal effects), effects on crops and materials. Moreover, damages caused by global warming provoked by greenhouse gases have been assessed on a global level within ExternE; however the range of uncertainty was much higher for global warming impacts than for other damages.

When analyzing transportation technologies, the study generally found that gasoline (petrol) passenger cars were associated with less external costs than diesel cars, in both urban and extra-urban passenger transport. Diesel urban buses had lower cost per passenger per kilometer (pkm) than gasoline cars in all cities with the exception of London.

Diesel cars scored poorly due to high air pollution costs attached to the particulate matter (PM) emissions. The study, however, was based on Euro 2 (1996) engine technology, which is no longer representative for today’s vehicle fleets. PM emission limits from Euro 2, Euro 3 (2000), and Euro 4 (2005) technologies are 0.10 g/km (DI), 0.05 g/km, and 0.025 g/km, respectively (Euro 4 vehicles are already available in areas which offer tax incentives for their early introduction).

Source: European Commission