Updating the Social Values Recommended for the Cost-benefit Analysis in France - Assessing the Impacts on a Tramway Project



Updating the Social Values Recommended for the Cost-benefit Analysis in France - Assessing the Impacts on a Tramway Project

Authors

Damien Grangeon, CEREMA - French Ministry in Charge of Transportation

Description

The “Quinet report” updates the social values used for project appraisal in France. This paper aims to simulate the impact of its implementation on the return indicators calculation, from the socio-economic assessments of a tramway line.

Abstract

In France, rules of the socio-economic assessments for project appraisal are determined in a directive called "Instruction cadre" (2005). Taking into account some external effects of the transport system in a cost-benefit analysis is a part of recommendations given in this directive. Time savings, accidents, air pollution, greenhouse gas emissions and noise are the externalities currently integrated into the socio-economic assessments of a new project. The social values for these externalities are fixed through an expert report named “Boiteux report” (2001).

Changes in the economic environment and improvements of scientific knowledge since 2001 lead to an updating of the “Boiteux report”. An expert report giving new recommendations for the monetarization of the transport external costs is published in 2013 by the Commissariat général à la stratégie et à la prospective (it is a French institution associated with the Prime Minister, dealing with the definition of long-term objectives for the economic, social, cultural and environmental development). Its implementation will modify the results of the socio-economic assessments for transport projects. This paper aims to simulate the impact of the “Quinet report” implementation on the results of the socio-economic assessment. This analysis is led from an example of transport project, the first tramway lines in Angers (France).

First, the socio-economic assessment of this tramway line, computed with the “Boiteux report” social values, is compared to an assessment calculated in accordance with the new recommendations proposed by the “Quinet report”. The paper quantifies the effect of implementing these updated social values on the benefits calculations (in particular, it compares the relative contribution of every externality into the global benefit according to the mode of calculation) and the return indicators (the net present value and the internal rate of return are the return indicators recommended by the French doctrine to assess transport projects). Then, some sensitivity tests are realized in order to put on evidence the parameters with high stakes for the return indicators calculation. The social value of time and the discount rate are already identified as parameters which have to be tested. Finally, the paper is completed with an analysis of the impacts of an input modification on the return indicators. It put in perspective the effects of the “Quinet report” implementation and the possible evolution of some others parameters (like the discount rate) compared, for instance, with the effects of a cost investment increasing or a traffic overestimating.

Publisher

Association for European Transport