Costs Imposed by Foreign- Registered Trucks on Britain's Roads

Transcription

1 27th October 2005 Costs Imposed by Foreign- Registered Trucks on Britain's Roads Final Report

2 Report Author John Dodgson NERA Economic Consulting 15 Stratford Place London W1C 1BE United Kingdom Tel: Fax:

3 Contents Contents 1. Introduction 1 2. Road Track Costs Road Track Costs by Category Allocating Road Track Costs to Vehicle Types Vehicle Track Costs per Km 5 3. Environmental and Accident Costs Localised Air Pollution Global Warming Carbon Emissions Noise Road Accidents 7 4. Total Costs Imposed by Foreign- Registered HGVs 9 NERA Economic Consulting

4 Introduction 1. Introduction This report provides estimates of the costs imposed by foreign-registered HGVs operating on Britain s roads. The estimates have been compiled for the Freight Transport Association and the Road Haulage Association. The estimates are based on distances travelled on Britain s roads by foreign-registered trucks as recorded in the DfT s 2003 Survey of Foreign Vehicle Activity in Great Britain 1, together with estimates of road costs, environmental costs and accident costs which have been derived by updating the estimates for 1998 published in NERA s 2000 report for DETR on lorry track and environmental costs. 2 DfT have provided the FTA with statistics breaking down foreign-registered goods vehicle mileage by type of road, and these data are shown in Table 1.1. Most of our work has involved updating our 1998 estimates of costs per vehicle km. Since these estimates are now five years old, we have gone back to original sources to do this, to take account of changes in the way data are now recorded, and to take account of changes in valuation methodology. We have also recalculated the figures for the particular classifications of foreign HGVs which were recorded in the DfT survey of foreign-registered trucks and which are shown in Table 1.1. To produce the estimates we have developed a spreadsheet model which permits simple testing of the assumptions incorporated in our calculations. Table 1.1 Foreign HGV Traffic on Britain's Roads, 2003 (Million vehicle kms) Type of HGV Motorway Other trunk A roads Total Rigid less than 36 tonnes Rigid between 36 and 38 tonnes Rigid over 38 tonnes Artics less than 36 tonnes Artics between 36 and 38 tonnes Artics over 38 tonnes Other All foreign-registered HGVs Source: Tabulations supplied by DfT to FTA from Survey of Foreign Vehicle Activity in Great Britain There are two main components of the calculations: 1. For track costs (which include both road capital charges and maintenance costs) we need to identify total road costs by category of expenditure and by main types of highway, and then allocate them to all motor vehicles using the roads according to allocation rules which are consistent with the rules used in our 2000 report. 1 2 National Statistics Transport Statistics Bulletin: Survey of Foreign Vehicle Activity in GB NERA, AEA Technology and TRL Lorry Track and Environmental Costs A report for DETR, April Earlier estimates and discussion of methodology for track costs can be found in NERA s earlier report NERA Reviewing Methodologies for the Determination of Road Track Costs December NERA Economic Consulting 1

5 Introduction 2. For environmental costs (localised air pollution, contribution to global warming, and noise) and accident costs, we need to identify the unit rates per km for particular types of HGV and apply valuations. These two sets of estimates are then combined to provide total costs per km. These are then multiplied by the total kms run by foreign-registered vehicles to give the total costs imposed by foreign-registered vehicles in a year on Britain s roads. NERA Economic Consulting 2

6 Road Track Costs 2. Road Track Costs As indicated in Section 1, road track costs refer to the costs of providing and maintaining roads. In our 2000 study we identified a number of components of these track costs, and then allocated them to vehicles according to different sets of rules. The way in which road costs are recorded has changed since 2000, so we have tried to identify costs as closely as possible to the categories that we used then. In this section of the report we first (Section 2.1) explain how we identified road costs, then (Section 2.2) show how we allocated them between vehicle classes so that we could measure costs per km for our six HGV classes, and finally (Section 2.3) present our estimates Road Track Costs by Category In NERA s earlier studies we calculated capital charges for roads using the resource accounting methodology that was then coming into use by the UK Government. We have used this methodology in the present study. We used published valuations of the English and Scottish trunk networks, taking averages of the April 1 st 2003 and April 1 st 2004 valuations. 3 We have made our own estimate for the Welsh trunk network based on an assumed average value per km and the length of the Welsh trunk network. For local authority roads we have used the same very rough estimates of value per km for different types of local authority road (principal, and other) that we used in our 2000 study, 4 and multiplied them by local authority road lengths. (The government is developing Whole of Government Accounts, which should eventually provide capital valuations for the local authority road network, but we do not believe that such estimates have yet been compiled. 5 ) All capital values were then converted to annual capital charges using a real cost of capital of 3.5 per cent set by the Treasury. 6 The National Road Maintenance Condition Survey includes figures for annual expenditure on structural road maintenance and routine road maintenance by type of road (trunk, principal and other) for both England and for Wales. 7 We have used these figures for 2003/04. We have used the published figure for structural and routine maintenance on trunk roads in Scotland, and allocated the published Scottish figure for total maintenance on local authority roads in Scotland between structural and routine categories on principal and other local authority roads so that the resulting estimates are consistent with costs per km in England and Wales. We have also derived estimates of street lighting costs. Figures for England and Scotland are published, and give a figure of around 900 per km of road per year. We have estimated a figure for Wales on this basis The English estimates are from DfT Resource Accounts , Nov 2004, p.44. NERA et al, 2000, p.7. The values were 750,000 a km for principal roads, and 200,000 a km for other roads. Since these were very rough estimates, we have not adjusted them for inflation. See See Highways Agency Annual Report and Accounts , p.67. National Statistics Transport Statistics Bulletin: National Road Maintenance Condition Survey: 2004, pp.51,52. NERA Economic Consulting 3

7 Road Track Costs We have not found a recent figure for traffic police costs so we have updated an estimate of 354 million in England and Wales in to roughly 500 million in 2004 based on inflation and inclusion of Scotland. Of the original estimate 20 per cent were estimated to be incurred in policing motorways, so we have allocated 20 per cent of the 500 million to motorways and other trunk roads and split the remaining 400 million evenly between principal and other roads, which is roughly in line with the way total traffic is split between these two types of road. Table 2.1 shows the total road track costs that we allocate between categories of road user. Table 2.1 Road Costs 2003/04 ( m) Trunk Principal LA other Total Capital charges 2, ,657 6,618 Structural maintenance ,115 2,367 Routine maintenance ,720 Public lighting Police Total 4,258 2,232 5,082 11,572 Source: NERA values from a variety of published sources (see text for details) Allocating Road Track Costs to Vehicle Types Our 2000 study allocated track costs to vehicle types according to different cost drivers. The cost drivers were: Vehicle-kms; Passenger car unit-kms: vehicle-kms multiplied by PCU values; Average gross vehicle weight kms: vehicle-kms multiplied by average vehicle weight; Maximum gross vehicle weight kms: vehicle-kms multiplied by maximum vehicle weight; and Standard axle kms. In the present study we have derived these drivers using vehicle-kms for cars, light vans, buses and coaches, and rigid and artic HGVs for the year 2003 from Transport Statistics Great Britain. 9 DfT have also supplied detailed HGV distances travelled for the six HGV categories used in this study. DfT have also supplied average vehicle weight figures for these six vehicle categories. We used the same PCU figures as in our previous study, while we adjusted the standard axle figures (which were supplied by TRL for our previous study, but related to a large number of different HGV categories) to be consistent with our six HGV categories. 8 9 A Ogilvie-Smith, A Downey, E Ransom Traffic Policing: Activity and Organisation Police Research Series, Police Research Group Paper 12, DfT Transport Statistics Great Britain 2004, Table 7.4. NERA Economic Consulting 4

8 Road Track Costs Because we have not been able to identify expenditure by the same detailed categories of routine maintenance as we did (with some difficulty) in 2000, we have used the following allocation rules in our present calculations: Fifteen per cent of capital charges are allocated on the basis of maximum gross vehicle weight and the remaining 85 per cent are allocated on the basis of PCU kms; Structural maintenance costs are allocated on the basis of standard axle kms; Routine maintenance is allocated 50 per cent on the basis of vehicle-kms and 50 per cent on the basis of average gross vehicle weight kms; Street lighting is allocated 50 per cent on the basis of vehicle kms (and the remaining 50 per cent is assumed to benefit pedestrians and cyclists and so is not allocated to motor vehicles); and Police costs are allocated on the basis of vehicle kms Vehicle Track Costs per Km Table 2.2 shows the resulting costs per vehicle km by class of vehicle. Table 2.2 Track Costs per Km, 2003/04 (Pence) Vehicle type Trunk Principal Other Cars Light vans Buses and coaches Rigid less than 36 tonnes Rigid between 36 and 38 tonnes Rigid over 38 tonnes Artics less than 36 tonnes Artics between 36 and 38 tonnes Artics over 38 tonnes Source: NERA calculations. NERA Economic Consulting 5

9 Environmental and Accident Costs 3. Environmental and Accident Costs This section of the report deals with the calculations of environmental and accident costs. Environmental costs are measured under three categories: localised air pollution created by a number of pollutants, namely NO x, PM10, carbon monoxide (CO), VOCs, 1,3-butadiene, and benzene; 10 carbon emissions, which are the main contributor to greenhouse gases; and noise Localised Air Pollution Our source for these emissions is the NETCEN inventory from which we have extracted data on grams per km emitted by rigid and artic vehicles at different speeds. We have then used figures on average speeds by HGVs on motorways, other trunk roads and principal roads to calculate grams per km of each of the emissions on these three types of road by different emission standards (pre-1988, pre-euro I (88/77/EEC), Euro I (91/542/EEC), Euro II, Euro III, Euro IV, and Euro IV+). These emission numbers were then multiplied by NETCEN year 2005 scaling factors, and then weighted by the year 2005 vehicle fleet compositions (which are available from NETCEN separately for rigids and artics) to give overall emissions in grams per km for rigid and artic HGVs. These emissions have then been valued, using valuation data supplied by Paul Watkiss of AEA Technology. For PM10s, NO x and VOCs we have taken the averages of the central low and central high values that have been published and which are 34,361 per tonne for PM10s, per tonne for NO x, and 464 per tonne for VOCs. 11 The values for carbon monoxide, benzene and 1,3 butadiene have not been published but Paul Watkiss has recommended that we use values of 1.40, 268 and 10,600 per tonne respectively. 12 However, costs per vehicle-km for HGVs for benzene and carbon monoxide are below 1p and we do not include these emissions in our final estimates Global Warming Carbon Emissions NETCEN also provides information on carbon dioxide (CO 2 ) emissions from HGVs. However, these emissions can also be calculated from an alternative source, namely estimates of HGV fuel consumption per km from the CSRGT. There is a simple relationship between consumption of diesel fuel and emissions of CO 2 per litre consumed. DfT have supplied us with data from CSRGT on fuel consumed per mile travelled by the six different weight range categories of HGV identified in the survey of foreign vehicle activity. We have used this to calculate emissions in terms of grams per km, and then valued this using cost per unit of carbon figures published in a Government Economic Service Working Paper Due to the introduction of ultra-low sulphur fuel, the levels of SO 2 from road transport are now so low that they are not included in the analysis. See P Watkiss, S Baggot, T Bush, S Cross, J Goodwin, A Hunt, F Hurley, M Holland, and J Stedman Evaluation of Air Quality Strategy (EPES 0203/1). Published by DEFRA, January 2005, AEA Technology Environment, Metroeconomica and the Institute of Occupational Medicine. Personal communication from Dr Paul Watkiss. NERA Economic Consulting 6

10 Environmental and Accident Costs in This report, which surveys the literature on measuring the costs of global warming, recommends using an estimate of 70 per tonne of carbon as a point estimate of the social cost of carbon emission in the UK, with a band for sensitivity analysis between 35 and 140. These estimates relate to emissions in 2000, and the report authors recommend that the point estimate should be raised by 1 for each subsequent year in which the emission occurs. Table 3.1 Environmental Costs per Km, 2004 (Pence) Motorway/trunk Principal Rigid HGVs NOx PM VOCs ,3-Butadiene Carbon dioxide Noise Total rigids Artic HGVs NOx PM VOCs ,3-Butadiene Carbon dioxide Noise Total artics Source: NERA calculations Noise Both the NERA report and the subsequent Leeds University report on Surface Transport Costs and Charges 14 used NETCEN sources, and showed that noise costs from HGVs are relatively low compared with localised air pollution costs. Consequently, we have not recalculated noise costs, but have instead added a small component to our environmental costs to allow for noise Road Accidents We note, as we did in our year 2000 study, that accident costs are not strictly an external cost imposed by one class of vehicle on another, since many of these costs will be covered by insurance payments. However, while insurance payments may cover physical damage costs, such as the cost of repair or replacement of damaged vehicles, they may not compensate for Richard Clarkson and Kathryn Deyes Estimating the Social Cost of Carbon Emissions Government Economic Service Working Paper 140, DEFRA and HM Treasury, January Note that the recommendation to use 70 per tonne of carbon is heavily influenced by results of the ExternE work. ITS Leeds, with AEA Technology Environment, for DETR Surface Transport Costs and Charges, 2001.p.104. See also NERA, year 2000 report, p.123. NERA Economic Consulting 7

11 Environmental and Accident Costs the pain of injury or the loss of life of an individual. Consequently, we have also included accident costs in our calculations. We do not have estimates of the involvement of foreign-owned HGVs in accidents on Britain s roads though there is no evidence that they are more likely, per km driven, to be more involved in a serious or fatal accident than a UK-registered vehicle. Consequently we have used national statistics from Road Accidents Great Britain to calculate accident rates in the main accident categories (fatal, serious injury, slight injury, damage only) on different road types by HGVs. These accident rates per vehicle-km are then multiplied by costs per accident data published by DfT in Highway Economics Note 1 and uplifted to 2003 values. But even if the foreign-registered vehicle accident rates were 50 per cent higher, this would only increase the total costs of foreign trucks that we report in Table 4.1 from 236m to 253m. Table 3.2 Accident Costs per Vehicle-Km (Pence) Motorways Principal Other local authority Fatal accidents Serious accidents Slight injury accidents Total accidents Source: NERA calculations. NERA Economic Consulting 8

12 Total Costs Imposed by Foreign-Registered HGVs 4. Total Costs Imposed by Foreign-Registered HGVs Table 4.1 shows our estimates of the total costs imposed by foreign-registered vehicles split by type of HGV and road. These estimates are based on the recorded distance travelled in 2003, but are valued at (approximately) 2004 values. The total cost is around 240 million. Table 4.1 Total Costs Imposed by Foreign-Registered Vehicles on Britain's Roads, Split By Type of HGV ( m) Type of HGV Motorway Other trunk A roads All Rigid less than 36 tonnes Rigid between 36 and 38 tonnes Rigid over 38 tonnes Artics less than 36 tonnes Artics between 36 and 38 tonnes Artics over 38 tonnes All foreign-registered HGVs Source: NERA calculations. In Table 4.2 we present this same estimated total cost, but in this table disaggregated by the type of cost imposed. This shows that track costs constitute around 70 per cent of the total, while environmental and accident costs each represent around 15 per cent. Table 4.2 Total Costs Imposed by Foreign-Registered Vehicles on Britain's Roads, Split By Type of Cost ( m) Type of cost Motorway Other trunk A roads All Track costs Environmental costs Accident costs All foreign-registered HGVs Source: NERA calculations. NERA Economic Consulting 9

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