Including Safety Effects in Cost Benefits Analysis.
G van der Linde, Transport Research Centre (AVV), NL
This paper treats the new 'Appendix on Safety Effects', on the evaluation of safety in transport infrastructure in the Netherlands. We discuss the measurement, valuation and presentation of different safety effects in cost-benefit analysis.
Including safety effects in transport infrastructure appraisal studies: a comprehensive approach in the Netherlands
This paper will treat the newly developed framework on the evaluation of safety effects in transport infrastructure appraisal. This framework will be presented in the course of 2007, in the Appendix on Safety Effects. The paper discusses on how safety effects can preferably be measured, valued economically and be presented amongst other project effects in the evaluation of transport infrastructure. The newly developed framework aims at improving the transparency and consistency of the current framework on the evaluation of transport projects in the Netherlands, by including in the equation risks on traffic safety, on transport and storage of dangerous goods, and on personal safety.
The ?OEI?-assessment framework on transport infrastructure
Since 2000, the Dutch Ministry of Transport prescribes the ?OEI? assessment framework as the standard for the evaluation of transport infrastructure projects. The guidelines in this framework are based on the principles of social cost benefit analysis, and cover all economic and societal effects relevant to transport infrastructure.
In recent years, structuring the pros and cons of an investment decision by performing a cost-benefit analysis following the OEI-guidelines, has become unavoidable for infrastructure planners. Moreover, basic principles in the OEI-guidelines have been adapted by other Ministries, to be used in the appraisal of any decision on a project that is considered of national importance.
Since 2005, the original ?OEI?-assessment framework has been updated and extended with a series of seven Appendices. The Appendix on Safety Effects will complete this series of Appendices with methods and guidelines on the evaluation of safety effects.
Safety effects in the framework
Following the OEI-guidelines, all potentially relevant project effects must be taken into account, including the relevant effects on safety. The Appendix on Safety Effects discusses the safety effects which are most relevant in the evaluation of transport infrastructure projects. Three main fields of safety are identified:
- traffic safety
- societal safety (transport and opslag of hazardous goods)
- personal safety (safety of the individual in transport systems)
For these three main fields, methods for measuring and valuation of safety effects are defined, including the presentation of effects in a concluding scheme. The Appendix aims at measurement and valuation: to measure an effect without a market price like safety in its own units, and in a second step, if possible, assign an economic value to the effect. If certain situations prove this impossible, at minimum a qualitative approach is required by describing the possible effects in words.
Issues discussed in the paper
The economic valuation of safety does not go without discussion. For many issues, consensus is lacking, or knowledge shortages exist. The paper will discuss some of the most important issues the Appendix deals with, and will also list the answers and choices which were drawn up.
The first note is that the method of cost-benefit analysis puts a high standard on the quantitative quality of the data used. The evaluation of safety effects will have to focus on changes of the safety level. In other words: the changed accident or incident risk, resulting from the project. To be able to assign an economic value to this change of risk, it is necessary that some minimum of quantitative measure exists. If the risk is unknown, or fluctuating, is may be less useful to assign a monetary value to the effect.
The paper follows the subjects being covered in the Appendix:
- A checklist on relevant of safety-effects according to the type of infrastructure project
- How to specify the economic benefits of safety: societal costs of safety risks
- Ethical issues on the valuation of safety effects and the valuation of human life
- The valuation and the value of Human (non-material) Costs
- The valuation of Group Risks (Risks to society) in cost-benefit analysis
- Prosperity aspects on the perception of safety risks
- Division of safety effects amongst regions or population groups
- The limitations of existing data on risk levels, changes in risk-levels and on the effectiveness of measures to reduce them.
- A clear presentation of the safety effects in one table.
And will round up by presenting conclusions on the use of safety-effects in policy decionmaking, and by presenting key-issues for further development of knowledge.
Association for European Transport