The Internalisation of Short-term Marginal External Costs of Sea Transport
Inge Vierth, Swedish National Road and Transport Research Institute (VTI)
The study quantifies the short-term marginal external costs associated with the use of Swedish national maritime infrastructure by vessels and the marginal external costs that this causes to society.
The study aims to identify and quantify the short-term marginal external costs associated with the use of maritime infrastructure by commercial passenger and freight transport vessels and the marginal external costs that this causes to society. These marginal external costs are related to the use of the fairways, pilotage and ice breaking services, congestion, accidents, greenhouse gases (GHG) and air pollution. The degree of internalization of the marginal external costs is calculated by dividing the fees paid by ship owners by the external costs. The value of external costs remaining after subtracting the fees paid by ship owners from the marginal external costs is not considered by firms when choosing a transport solution and is, therefore, borne by society. The results can be used as the basis for differentiated fee tariffs and other polices.
Various methods are applied to calculate the marginal external costs of the use of the Swedish national maritime infrastructure. The marginal external costs of pilotage and icebreaking are calculated based on data from the Maritime Administration for 2014 (pilotage) and for 2010-2015 (icebreaking). The marginal external costs related to the maintenance of the fairways and congestion are assessed to be negligible. Automatic information system (AIS) data is used to calculate vessel-kilometers and fuel consumption in Swedish waters, broken down into eight vessel categories and eight size classes. The calculation of the marginal external costs of accidents is based on The Swedish Transport Agency's accident database 1985-2014 and the monetary values of deaths and injuries recommended by the Swedish guidelines for cost-benefit analysis (CBA). The marginal external costs of GHG emissions are derived from the fuel consumption and the GHG-values recommended by the CBA-guidelines. The marginal external costs of air pollution at the regional level caused by commercial vessels, pilot boats and icebreakers are based on the fuel consumption, the amount of emissions and applying the Impact Pathway approach (IPA) that takes into account the distribution of the emissions. Sensitivity analyses are carried out in order to handle uncertainties.
The Swedish Maritime Administration´s annual revenues of fairway dues and pilot fees of about € 150 million cover 60-90% of the calculated marginal external costs per year. A high share of the marginal external costs is caused by emissions: about 49% by GHG and about 27% by air pollution. The marginal external costs of air pollution, as calculated with the help of the IPA, are much lower than in earlier studies that were not adapted to sea transport. The fuel consumption calculated based on AIS-data is about 50% higher than in earlier studies that were based on assumptions. About 7% of the marginal external costs are related to accidents; these costs are higher than in earlier studies that were based on assumptions. The marginal external costs for icebreaking (about 8%) and pilotage (about 9%) are in line with earlier studies. Todays’ pilot fees cover about 86% of the Swedish Maritime Administration’s costs for pilot services; pilot fees based on the marginal external costs of pilotage would cover about 32% of the costs and would require more funding from other sources.
Knowledge regarding the external costs of noise, sea pollution and other marine externalities is considered too limited to be able to quantify the relevant marginal external costs, which
Association for European Transport