The true costs of traffic:
A review of external costs and their bearing on pricing policy

Over the past fifteen years ‘internalisation’ of the external costs of traffic has been the subject of much research, discussion and writing. However, improved scientific understanding still often leaves policy-makers, politicians, industry and environmental organisations far apart in terms of the positions taken on the issue. The Dutch environmental organisation Stichting Natuur en Milieu therefore asked CE to review the main body of theoretical, empirical and policy-related understanding on external effects, their monetarisation and means of internalising the costs thus calculated. This report is structured around a series of Frequently Asked Questions, some of which can be briefly answered while others require more extensive discussion. The main issues were discussed at a working conference with several dozen people engaged in pricing policy.