The True Costs of Road Transport: How to Make People Aware, and How to Make Government Set the True Prices András Lukács Clean Air Action Group, Hungary ( TCFC VII, Istanbul, August 30, 2007

What are the costs of road transport?

Production costs These are internal, so we do not deal with them here in detail. However, it must be mentioned that very often it would be more sensible to spend one’s money on something else than cars. (Opportunity cost!)

Road building and maintenance

In Hungary VAT is refunded for motorway constructions (but not for railway constructions)

Environmental and health damages

greenhouse gases (global warming) other air pollution water pollution soil pollution noise other vibrations (especially heavy vehicles) land use fragmentation of nature accidents traffic jams hindering users of other modes of transport (e.g. pedestrians and cyclists) special urban problems, leading e.g. to psychological disorders

Environmental damages due to up- and downstream processes For example: Manufacturing of motor vehicles Road building Oil extraction and refining Disposal of used motor vehicles

Congestion

Fuel tourism and fuel smuggling Customs Office

Competitive advantages of road freight transport due to violation of regulations on traffic safety, working time, truck load weight etc.

Losses of the state due to the black market practices (tax evasion, smuggling etc.) by truck drivers

Competitive advantage of road freight transport due to anti-market financial measures by the state concerning the railway freight transport

Accounting private use of cars as official use i.e. evasion of personal income tax and social security tax etc. by fraud based on car use This is an enormous incentive to car use in some countries (Hungary: 3% of GDP)

New houses in the surroundings of Budapest Subsidies to urban sprawl

Shopping malls mushroom around Budapest Subsidies to urban sprawl

A huge shopping mall near Budapest – 10 years ago this was a green area Subsidies to urban sprawl

Advertisements, media

Excise duty on fuel Annual vehicle tax Registration tax Vehicle transfer tax Environmental fees (e.g. on tires, car batteries) Kilometer fee for trucks Motorway tolls Company car tax Parking fees Congestion charge Extra weight fee State revenues from cars and trucks

BALANCE OF STATE EXPENDITURES AND REVENUES FOR TRUCKS IN HUNGARY Expenditures10,4 billion EUR Revenues 0,3 billion EUR Subsidy10 billion EUR

BALANCE OF EXPENDITURES AND REVENUES FOR CARS IN HUNGARY Expenditures4,1 billion EUR Revenues2,0 billion EUR Subsidy2,1 billion EUR

All this is only for one year, however these subsidies have been accumulating already for many years!

The distorted prices lead to wrong decisions on all levels. They stimulate the use of unsustainable transport modes. These processes are not only environmentally unsustainable, but also economically, financially. The user/polluter pays principle must be applied.

What to do? Some experiences of the Clean Air Action Group

CAAG and other NGOs hand over a petition for the Prime Minister demanding more funds for public transport and railways, and less for motorways

„Living streets” organised by CAAG in the center of Budapest

Demonstration at the Hungarian Parliament for an environment-friendly transport policy

CAAG’s demonstration before the Budapest City Hall for stricter parking regulations, increasing parking fees and better use of public space

Heavy trucks cause enormous road damages. In many places they damage also buildings and public utilities. One 40-tonne truck causes as much damage to the road as cars. Source: New Scientist, 1992

Campaign FREIGHT: FROM ROAD TO RAIL Funded mostly by the Oak Foundation

Advertisements: Television Newspapers Giant posters Small posters in metro Letters to all mayors in Hungary (3200) all members of the Parliament ministers 30-minute film Wide press coverage

Kick-off press conference of the campaign

Conference on truck traffic organised by CAAG in the House of the Members of Parliament

Demonstration of CAAG and local residents agaist heavy truck traffic

Nation-wide opinion poll

The Hungarian Parliament this year decided to introduce a kilometer fee for trucks from 1st January It also decided to increase subsidies for combined transport.

CAAG’s correspondance with the European Commission The Hungarian Government is asking for a lot of EU money for road construction. The European Commission is likely to approve this. CAAG’s position: 1.No aid should be given until all external costs are internalized. Road users must pay the costs. Otherwise the polluter pays principle will be violated. 2.The SEA of the Hungarian road construction program shows that it will be environmentally unsustainable. According to the EU legislation no EU aid can be given for unsustainable projects…

Thank you for your attention! TCFC V in the Budapest City Hall