Presentations by Mr. Schellnhuber and Mr. Piechaczyk are now available.

On the 6th of May CER hosted a half-day conference event in Brussels called “A market-based instrument approach to sustainable transport”. The conference was held in the context of the ongoing debate on how to internalise the external costs of transport and the expected proposal in June from the European Commission to revise the Eurovignette Directive.

Aad Veenman, CEO of Dutch railways NS and chairman of CER, opened the conference, noting the importance of the topic for the environment and society as a whole, but also for the railway sector. He pointed out that the principle idea that users have to take into account also their inflicted environmental costs in order to make the right decisions is simple and has been discussed for a very long time. Internalisation of external costs has been an issue in economic science at least since the 1960s and a political issue for the past 30 years. Already in 1991, CER issued a report on the externalities of transport. Still, in 2008, it is not possible (according to EU legislation) to include external costs in the charges for road traffic, but finally a proposal in this direction is on its way through the revision of the Eurovignette directive. Aad Veenman argued that one has to understand that internalising costs that have not yet been paid for will lead to increased charging. This has been difficult for many to accept up till now, while in comparison it is today viewed as natural in e.g. the modern waste industry. The recent debate about climate change, the increasing effects and higher awareness of congestion and emissions have rightly put the focus on the challenges to create a more sustainable society. Aad Veenman concluded that in meeting this challenge, rail, as the most sustainable transport mode, has a very important role to play.
 

The first keynote speaker, Professor Hans Joachim Schellnhuber, Director of the Potsdam Institute for Climate Impact Research (PIK) made a presentation with the title “Scientific evidence and political action: Consequences of the latest findings in international climate impact research”. He gave the background and historical perspective to the current debate on climate change and weather disasters, and an update on what can be expected if action is not taken immediately. A simulation video of the possible temperature increase from 1950 to 2100 was presented. Today, the global mean temperature is 15°C. If CO2 levels are doubled and result in a temperature increase of only a few degrees, today’s sea level may increase with 50 meters. If temperature rises to 20°C, the sea level may rise with as much as 100 meters. Professor Schellnhuber pointed out that the problem is that these scenarios are no longer viewed as unrealistic. Instead, they are “high probability high impact events” related to what will happen in a “business-as-usual” scenario. To put a 100 m sea level increase into perspective, alarming impact maps were shown. So far, the vulnerability of the European transport system in regard to climate change has not been studied, while this issue has recently been raised in the US. In order to tackle the problem of climate change, Professor Schellnhuber argued for a 3rd Industrial Revolution, focussed on renewable energy sources like solar thermal power. The transport sector must take responsibility for its contribution to climate change. While the net rail CO2 emissions have been decreasing since the 1960s, they are sharply increasing for other transport modes, i.e. road, aviation and shipping. He concluded his presentation by mentioning the great hopes for the setting of real and substantial targets in a global deal on climate protection at a forthcoming summit in Copenhagen.

The second speech was delivered by Xavier Piechaczyk, Chargé de la Sous-Direction de la politique du developpement routier, French Ministry for Ecology and Sustainable Planning and Development. His presentation, “Transport policy and environment: perspectives of the French presidency” dealt with the implementation of the current Eurovignette directive (“Eurovignette 2”) and the outlook for the revised “Eurovignette 3”. Sustainable development will be a priority for the French presidency, aiming at the development of alternative means of transport and an increased modal share of rail and inland waterways. He recalled that not all Member States have even transposed the current version of the directive and stressed the importance of going further. The transport sector has to pay for its external costs. A number of difficulties can be foreseen in the context of concerns for competitiveness vs. concerns for the environment, the views of peripheral countries vs. transit countries, technical challenges, and also the end of the mandate of the European Commission and the Parliament. Xavier Piechaczyk argued that environmental charges are indeed necessary, but it is important to optimise the system, so that revenues can finance new transport infrastructure and help increase capacity, and not only go to finance the charging system itself.


 

A panel discussion followed, including participation from Benoît Le Bret, Head of Cabinet of Vice-President Jacques Barrot, DG Tren, Eberhard von Koerber, Co-President of The Club of Rome, Professor Werner Rothengatter, Head of the Institute of Economic Policy Research, University of Karlsruhe, Jean-Claude Delen, Managing Director Belgium & Luxembourg of DHL Global Forwarding, and Xavier Piechaczyk. The discussion was moderated by Malcolm Fergusson, Institute for European Environmental Policy.



Eberhard von Koerber pointed out that from a global perspective, mobility is growing even more than in Europe. In the discussion of climate change it is also important to include the need for energy. He argued that changes take time, but we are already running out of time and most figures are already outdated once they are presented. He highlighted the case of Switzerland, where internalisation of external costs has actually been done, raising the question if Europe can now follow or if there are too many conflicting interests hindering change.




Jean-Claude Delen was asked on his view on possible new charges for the road sector. He argued that price, although important, is not everything. To be able to deliver quality is key in transport. DHL is not an opponent of rail, being a user of all modes including 7-8% by train. He stressed the need of more flexibility and intermodal services. To achieve this, rail has to improve both in terms of infrastructure and administration, in order to avoid delays such as when trains are stopped at borders for bureaucratic procedures.



Werner Rothengatter argued that setting the prices right is the important first step, then a change in behaviour will follow. Freight volumes cannot be expected to decrease in the future, as it is the growing trade that drives freight volumes. Therefore, a shift to a different mode is essential, as is the improvement of loading factors. He also stressed that maritime shipping is not a very environmentally friendly mode of transport and one should therefore look for solutions to get a shift also from maritime to rail transport, mentioning the Transsibirian railway as an important example.





Benoît Le Bret was asked about the contents of the forthcoming proposal from the Commission. He agreed that pricing is indeed important if we want to change behaviour. For the road sector, he pointed out that it is currently the only mode where internalisation of external costs is not allowed. With a revised Eurovignette directive the Commission seeks to break this, and at the same time also break with the old name “Eurovignette”, rather talking about a framework for “green and smart charging”. He stressed the need not only for increased charges, but also increased variation of charging dependent on when and where etc traffic occurs. Also, the toll collection system must be more efficient to make it easier to pay and avoid additional congestion. The proposal is close to be ready (to be adopted in June) and Benoît Le Bret hoped that the French presidency would work for a quick implementation. It will be up to the Council and the Parliament to have this accepted in the first reading, something Benoît Le Bret meant could and should be possible.

Xavier Piechaczyk stated that the French government fully intends to go forward. Many tools are necessary in order to achieve the modal shift. In order to convince the peripheral states of Europe, the discussion has to take place at the highest possible level.

Malcolm Fergusson asked Benoît Le Bret about the handling of CO2, since it was recently revealed that this external cost category (along with accidents) might be excluded in the forthcoming proposal for a Eurovignette revision (focussing on congestion, noise and air pollution). Benoît Le Bret explained that for the time being, the focus has been to concentrate on the most problematic external cost category for each mode: congestion for road, CO2 for aviation, and noise for rail. CO2 is considered more of a global problem not suited to tackle through road tolls, although Benoît Le Bret argued that by fighting congestion there will also be an indirect effect on CO2 emissions.







Werner Rothengatter meant that a revised Eurovignette directive is a first step in the right direction, but questioned the choice of externalities to focus on. Congestion costs are by definition time costs and operational costs, thereby not related to the environment. To charge low (or not at all) for climate change (CO2) and high for congestion would be to present the wrong picture.

Malcolm Fergusson then asked the panel members to give their views on the use of revenues from charges.

Benoît Le Bret made it clear that earmarking of revenues is of key importance to the Commission. Revenues should be used for alternative modes, for cleaner vehicles and for better roads. Earmarking is also of importance to get the road sector and peripheral countries onboard.

Jean-Claude Delen asked for revenues to be reinvested in the same mode but on different infrastructure, for example urban distribution centres which could facilitate the use of smaller, cleaner trucks.

Werner Rothengatter pointed out that it is bad when the net effect is zero, i.e. when other budget means are reduced with the argument that the transport sector can keep the new revenues. The revenues from charges should be used to strengthen the transport sector and go to the more environmentally friendly mode, for example to reduce bottlenecks. In the long run it is not good to have cross-subsidisation between modes, but in the short run it can be necessary to induce change and get a modal shift.

Xavier Piechaczyk argued that even if charges alone may not lead to rail taking over part of the freight volumes from road, it will be an important source of revenues that can be used to develop other, less polluting modes.

Eberhard von Koerber made the point that in addition to the push-effect from charges it is also necessary to get a pull-effect from the private sector. If revenues from charges can help make private investments look more attractive it is a good thing.

After the panel debate, Johannes Ludewig, Executive Director of CER, made some closing remarks. He concluded that, not least after listening to Professor Schellnhuber, it is clear that no one can afford to wait longer to take action. He pointed out that for too long has the price mechanism been out of order in the transport sector, giving the wrong impression that transport is “cheap” and neglecting the true costs for society as a whole. He was grateful to Commissioner Jacques Barrot who triggered the discussion on a Eurovignette revision already in December and made a general remark that in recent years much has improved in the relationship between the Commission and the transport sector, with the Commission being open to listening to arguments and uphold a dialogue. Finally, Johannes Ludewig thanked all the participants for their contributions.

The programme of the conference can be downloaded here.

Presentations by Mr. Schellnhuber and Mr. Piechaczyk are now available.