Estimating the external costs of UK passenger transport: The first step towards an efficient transport market

The external costs of transport are important in the analysis of transport policies and projects. Such analyses require the estimation of external costs on a consistent and appropriate basis. It is appropriate to measure these costs at the margin, and in this paper, for the first time, the marginal external costs for UK passenger transport are estimated. These costs were estimated by type and time of journey for different sectors of the UK passenger transport market. Where necessary, new techniques and models were developed to estimate marginal external costs. Otherwise, standard techniques and existing valuations were used. The estimates of the marginal external costs of local air pollution and global warming are surprising low. Possible errors and omissions are examined for these estimates.