Evaluating the external costs of a modal shift from rail to sea

An application to Sweden’s East coast container movements

Abstract

This study analyzes the comparative level of social and external costs if an existing transport chain is replaced by one that includes a greater use of shipping. The main objective of the paper is to assess, on the basis of changes in social and external cost, the potential effectiveness of policies which aim to promote a modal shift to shipping. The social and external costs of both options are evaluated, therefore, using both Sweden’s national guidelines for cost-benefit analysis and the European guidelines. A secondary objective of the paper is to evaluate the sensitivity of outcomes to the methodology applied and the input values employed, as well as to identify the relative strengths and weaknesses of these two CBA methodologies when applied to choices involving a shipping mode, The paper concludes that evaluation outcomes are highly sensitive to the choice of CBA methodology and the input values embedded therein. In addition, a number of shortcomings with the guidelines are identified, the most important of which are the need to: (1) have specific values for air pollution from ships; (2) incorporate a system for continuous updates of emission factors, given that vessel speeds vary over time and; (3) incorporate values for water pollution and its effects on the coast and sea bottom. For the Swedish guidelines specifically, there is a need to encompass a value for the scarcity of rail capacity.