ENVIRONMENTAL VALUATION. IN: HANDBOOK OF TRANSPORT MODELLING

Many aspects of transportation affect the environment. Road construction may displace wildlife habitat. Emissions from automobiles may reduce air quality and, in turn, affect human health. These human-health effects may be increased in the number or duration of symptoms (morbidity) or they mean include premature mortality. In an economic framework these effects are almost always externalities, i.e., they are uncompensated impacts on other individuals that are not taken into account in the market system. The cost of maintaining good air quality, for example, does not enter into the decision of whether to transport foods by truck or rail, since the cost in not reflected in the market. Environmental valuation arose in an attempt to calculate the monetary value of the impact on the environment. Monetary impacts calculated in order to use these in planning decisions (benefit-cost analysis) or in pricing decisions such as taxation and toll setting. In principle, the inclusion of environmental values in planning decisions will lead to better decisions on the development of transportation infrastructure. Also, the inclusion of environmental values in prices signals such as tolls and taxes will result in more efficient use of both transportation and environmental resources.