Political press release;

“Negative External Cost of Transport Only Paid by Public.”

By Citizens Environmental Advocacy Centre.

Letter to; Honourable Prime Minister of New Zealand Jacinda Ardern.

7th April 2019.

24 people have died on our roads during the last single week, the worst statistic NZ has ever seen.

We have been advocating to Government since 2001 in Napier, in support for (full) passenger and freight rail services to be restored to service again.

“NEGATIVE EXTERNAL COST OF TRANSPORT ONLY PAID BY PUBLIC.”

Here Prime Minister we lay out our full rail policy position with evidence.

QUOTE; NIWA.- “Environmental Science and Policy”

“External costs are not born by the public and private transport users - they are paid by others, generally the society as a whole, but also the environment.”

https://www.niwa.co.nz/sites/niwa.co.nz/files/import/attachments/chc2006_6.pdf

Published in “Environmental Science and Policy” Vol 9 (2006) pp 55-66 TRANSPORT COST ANALYSIS: a case study of the total costs of private and public transport in Auckland. Astrid Jakob1 , John L. Craig1 and Gavin Fisher2 1. University of Auckland, School of Geography and Environmental Science, Tamaki Campus, Private Bag 92019, Auckland, New Zealand 2. National Institute of Water and Atmospheric Research, 269 Khyber Pass, Newmarket Auckland, New Zealand.

EXTERNAL COST OF TRANSPORT To estimate the total cost of transport, it is necessary to look at indirect or external costs simultaneously. External costs are not born by the public and private transport users - they are paid by others, generally the society as a whole, but also the environment. These mainly comprise: external accident, air pollution, climate change, external parking, congestion costs and others (Becker, 2002; Litman, 2002). Of all transport related external costs evaluated in the literature, external accident, air pollution and climate change are the three largest (Maddison, 1996), comprising 77% of the overall costs (Becker, 2002). 24 people have died on our roads during the last single week, the worst statistic NZ has ever seen.

We have been advocating to Government since 2001 in Napier, since 2001 in support for rail.

So now we advocate to restore rail passenger and freight throughout all NZ regions, to reverse the skyrocketing road fatalities.

Remember our ‘society’ cost of paying the “external costs of using truck freight”

So when NIWA scientists “Environmental Science and Policy” say this, we public also need to be considered.

• No to more roads.
•
This is not the way forward, as will only bring yet more trucks.

So we ask the PM Ardern; – please stop this truck madness.

Private vehicles are seriously over- subsiding all of those private truck freight industries and this must stop.

• More money needs to be reverted towards restoring all NZ provincial rail services, as 24 people have died on our roads during the last single week, the worst statistic NZ has ever seen.
•
• The cost of private vehicle use is just to high now and Government must act to save lives and rail in NZ.
•
• This last week’s fatalities was the latest evidence that there is a horrific cost of subsidies spent by private vehicle users given to Government to prop up a failing costly truck freight industry that is killing many on our roads and making roads unsafe and very costly to repair now so stop this ‘un-sustainable truck freight subsidy by the public users of our public roads’.
•
https://www.niwa.co.nz/sites/niwa.co.nz/files/import/attachments/chc2006_6.pdf
Published in “Environmental Science and Policy” Vol 9 (2006) pp 55-66 TRANSPORT COST ANALYSIS: a case study of the total costs of private and public transport in Auckland. Astrid Jakob1 , John L. Craig1 and Gavin Fisher2 1. University of Auckland, School of Geography and Environmental Science, Tamaki Campus, Private Bag 92019, Auckland, New Zealand 2. National Institute of Water and Atmospheric Research, 269 Khyber Pass, Newmarket Auckland, New Zealand.

EXTERNAL COST OF TRANSPORT To estimate the total cost of transport, it is necessary to look at indirect or external costs simultaneously. External costs are not born by the public and private transport users – they are paid by others, generally the society as a whole, but also the environment. These mainly comprise: external accident, air pollution, climate change, external parking, congestion costs and others (Becker, 2002; Litman, 2002). Of all transport related external costs evaluated in the literature, external accident, air pollution and climate change are the three largest (Maddison, 1996), comprising 77% of the overall costs (Becker, 2002). Therefore these three costs are considered in this chapter. One has however to keep in mind that the degree of confidence varies between these three costs. Whereas accident costs, like property damage, can be calculated quite precisely, climate change costs are less certain. For this reason a very conservative approach has been applied which is discussed in more detail throughout this section. The literature suggests several techniques to quantify and monetise external effects of motor vehicle transport such as damage cost method, control or prevention cost method, hedonic compared to contingent valuation method. These methods are described in detail in Bruce (1995), Himmel (1999), Litman (2002). None of these methods can be used to estimate all motor vehicle related external costs without uncertainties. For each impact a different approach according to its nature has therefore been applied and uncertainties stated which has likewise been done in Becker (2001), Litman (2002), Maddison (1996) or Maibach (2002).

CEAC wrote this article on cost public face of high road damages last month.

http://www.scoop.co.nz/stories/PO1903/S00323/the-hidden-trucking-industry-subsidy.htm

The Hidden Trucking Industry Subsidy
Sunday, 31 March 2019, 2:07 pm
Quote;
Freight trucks cause 99% of wear-and-tear on US roads, but only pay for 35% of the maintenance. This $60B subsidy causes extra congestion and pollution, and taxpayers pay the bill.

SO; ‘WE GIVE ‘PUBLIC’ SUBSIDY TO TRUCKS WHY NOT RAIL’?

Recap; History of truck subsidies in NZ.

Private vehicles are wrongly over- subsidising truck freight as far back as 2007 according to a highly respected organisation in NZ called (IPENZ).

We now see that perhaps we need to request that Central Government now structure both transport infrastructure links in the same manner to avoid distortions in the financial integrity of both modal operations for the next 50yrs as Lawrence rightly suggests we do plan for.

Perhaps we can begin tolling roads for commercial freight companies due to the high freight carrying and high road wear?

The toll can be adjusted to the wear and repair costs generated so thereby self funding our roads?

Private vehicles then can their costs of their wear of the roads by using the IPENZ estimated costs in their road use costing report.

The last IPENZ report shows that of both road & rail costing of contributions from each transport mode;

Rail pays 77% of their total cost of maintaining the rail.

Private road users pay 66% of their cost of maintaining the roads.

Truck transport pays 54% of their cost of maintaining the roads.

These figures may change as the demographics change over time.

Either both modes use equal cost structural mechanisms such as the” Pot” of funding or we find another type of similar equal funding vehicle for both modes.

The attached IPENZ review warns that careful consideration must be made when deciding closure of rail as often it is not later reversible.

http://www.productivity.govt.nz/sites/default/files/Sub%20025%20-%20IPENZ%20Submission_0.pdf

2.4 RAIL

IPENZ is supportive of the Government’s Turnaround Plan for KiwiRail to upgrade rail infrastructure and rolling stock to help increase New Zealand’s economic productivity and growth. IPENZ also recognizes that elements of the network are uneconomic and may need to be closed. The decisions to close particular lines need to be taken with care – these decisions are often irreversible, and closure can erode wider network profitability. Line closures also impact on other components of the supply chain such as ports. Page 6 of 8

3. EFFICIENCY OF INTERFACES BETWEEN COMPONENTS

Question 57. Should decisions on investments in ports and in the associated infrastructure links to ports be left to the judgements of the individual suppliers of the separate components? Or would some sort of overall strategic plan provide useful guidance and some assurance that complementary investments will happen?

The major regional councils undertake multimodal transportation modelling and planning and these play a major part in designing the transport networks in metropolitan areas. This modelling includes specific localised freight analyses. Modelling is a sophisticated planning tool that uses a range of criteria to design and future proof (through scenario testing) a desirable and integrated transport network. Through this process the network can be designed to seek to achieve a range of objectives including those enabling regional economic growth, the efficient use of public capital, affordability, improving accessibility, and minimising environmental impacts.

Therefore a regional transport plan that recognises the freight supply chain’s interdependent components, developed in an inclusive way, can provide a context for development by both public and private infrastructure providers, and are a valuable tool for assisting with commercial investment decision making.

Similarly the Ministry of Transport undertook the National Freight Demands Study in 2008. This provided valuable information on existing and future freight demands.

Thus information and analysis by public agencies can be very useful for the private sector.

An interesting suggestion in the 2004 Infrastructure Stocktake recommended to Cabinet the concept of “facilitated discussions” between by central government, local government and private sector and infrastructure users and providers. This could be effective in bringing together the common issues – freight infrastructure development is driven by similar growth demands.

4.1.1 Pricing.

Many argue that if the prices are right (including externalities and the cost of capital), this will drive economically efficient outcomes. Each of the transport modes have different environmental impacts – noise, water quality, air quality and pricing mechanisms could capture these differences. The Ministry of Transport undertook the Page 7 of 8

Surface Transport Costs and Charges study in 2007 but this did not extend to sea transport. In theory pricing would place all transport modes on a level playing field. The Productivity Commission should consider whether improving pricing signals is feasible across all modes in the medium term. It seems that there is increasing acceptance of toll roads, but any form of congestion pricing or road network pricing would appear to be some years away.

4.1.2 Neutrality of public funding

Roads and rail are often competing modes for the freight business and this raises the problematic issue of the different government support for road and rail to meet the demands of the growing “freight task”. Recognising the issues with implementing pricing mechanisms, the Commission must consider whether Government (and local government) funding mechanisms are neutral and do not favour one mode over the other.

Further, commercial disciplines, investment decision making and financial reporting mechanisms (including balance sheets) are not applicable to the roading network. As a result of this and the acknowledged difficult funding allocation issues, there are inevitably cross subsidies between light vehicles and freight transport.

End

So then this question arises; – ‘can their higher costs given to Government of their wear of the roads (being far less than truck transport) since 2007 now be used to fund rail instead’?

The IPENZ (Institution of Professional Engineers New Zealand) estimated costs in their ‘road use costing report’ suggested this in 2007.

The last IPENZ report shows that of both road & rail costing of contributions from each transport mode;
Rail pays 77% of their total cost of maintaining the rail.
Private road users pay 66% of their cost of maintaining the roads.
Truck transport pays 54% of their cost of maintaining the roads.
These figures may change as the demographics change over time.
Either both modes use equal cost structural mechanisms such as the” Pot” of funding or we find another type of similar equal funding vehicle for both modes.

The IPENZ review warns that careful consideration must be made when deciding closure of rail as often it is not later reversible.

Government must review the statements below made clear by IPENZ in 2005 to the Clark Government of the importance of our rail system.

Government must work with cabinet to resolve these issues now of overuse of public funding of only roads, roads, and more roads just for freight trucks.

‘As the NZ Government offers a subsidy to buy an electric car’ why not also for ‘Electric locomotives’ also?

We hope Government will include our input here in your plans for finishing the Zero Carbon Bill and use the EY report here also.

https://www.kiwirail.co.nz/uploads/Publications/The%20Value%20of%20the%20Rail%20in%20New%20Zealand.pdf

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