Environmental Costs of Road Projects Reassessed

Thursday, 18 December 2014

Austroads has released an update to the parameter values used to estimate environmental costs in the economic evaluation of Australian road projects.

Environmental Costs of Road Projects Reassessed

The methods used to update environmental costs had become outdated and central agencies have increasingly demanded that accurate costs be included in the evaluation of road infrastructure and transport projects.

This update of values uses a new method and drew on new data sources to derive the estimates.

The revised methodology is the result of a two year project that included an extensive literature review and an in-depth assessment of seven international and Australian studies.

The CE Delft, Infras & Fraunhofer ISI study from 2011, involving 27 European Union countries, was identified as the most recent and comprehensive study of transport externalities across modes and externality types that could be adapted to Australian conditions.

The new modelling approach developed to calculate the updated values draws on the European study and builds on a 2003 Austroads study Valuing Environmental and Other Externalities.

The updated values and user guidance is provided across a range of categories such as air pollution, greenhouse gas emissions, noise, soil and water pollution, biodiversity, nature and landscape, barrier effects, and upstream and downstream costs. These are further disaggregated according to passenger and freight transport (road and rail) in urban and rural locations.

The changes in methods and data sources have reduced the estimated values compared with those previously published by Austroads. This is examined in detail in Appendix E of the report. Reasons for the reduction are different for each category of values but influences include new regulations and improved technology that have reduced emissions.

The look-up tables in the report provide a set of values calculated according to a consistent source using internationally recognised research adapted for Australian conditions along with detailed user information on the application of the values.

While it is acknowledged that there are many avenues for further research, the updated values are an important part of a process to develop more knowledge and use of externality estimates in project evaluation.

The report will inform the provision of environmental parameter values in the revision of the National Guidelines for Transport System Management which will be released for public comment next week.

Report link: Updating Environmental Externalities Unit Values

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