Evolutions of the Reference Values Used in Transport CBA National Guidelines of Three Countries and What They Reveal



Evolutions of the Reference Values Used in Transport CBA National Guidelines of Three Countries and What They Reveal

Authors

David MEUNIER, University Paris-Est LVMT UMR_T9403, Christoph WALTHER, PTV AG Karlsruhe and Bauhaus University Weimar, Tom WORSLEY, Institute for Transport Studies University of  Leeds

Description

The paper presents, analyses and compares the evolution of reference values used in national guidelines issued for cost-benefit analysis of transport infrastructure projects, over the last 3 to 5 decades, in France, UK and Germany.

Abstract

The paper presents the evolution of reference values used in national guidelines issued for cost-benefit analysis of transport infrastructure projects, in three countries: France, UK and Germany.

The nature of these values has evolved step by step, starting from classical items such as value of time and safety and evolving towards environmental externalities – noise, air pollution, ..) and even more global externalities (greenhouse gases). Within each nature of value, an increasing degree of differentiation of the values has also been observed.

Looking back over the last fifty years, we analyse the evolution of the main unit values, which reveal how the prism of transport CBA has taken account of the evolution of collective preferences together with technical breakthroughs and updates stemming from the observation of economic agents’ behaviours.

Since transport projects have long term effects, the guidelines included evolution rules for the unit values in order to project them for all years included in the evaluation period. The combination of unit value updates and evolution rules updates shows interesting features.
For instance, French values of time are found to be remarkably stable compared to safety values or environmental values, which show much sharper increases.

But how do these thematic observations actually translate in the end at the level of a transport project?

Simulating these evolution rules and values allows us to illustrate and compare how the same present project would have been assessed using former guidelines, revealing how the evolution of valuation rules has or not a noticeable impact in CBA results.
More precisely, we test two benchmark road projects and complete these simulations with a more in-depth analysis of CO2.

Besides the factual observations and comparisons outlined above, a more methodological conclusion is that the evolution of unit externality values does not necessarily give an accurate idea of the evolution of the importance given to this externality in each country, nor of the relative importance given comparatively in each country. It is necessary to take account of the evolution rules which are issued together with the updating of these unit values, and also to take account of specific CBA rules used for project evaluation, especially discount rates and the length of the evaluation period.

Publisher

Association for European Transport