Transport Logistics

4.5. Distribution of costs

An equitable distribution of costs and benefits may be achieved by charging beneficiaries the full

cost based on the Beneficiary Pays Principle (BPP), and by internalising external costs (e.g.

congestion taxes) based on the Polluter Pays Principle. The BPP is justified because it is assumed that

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people will pay for the use of a facility if they feel that they benefit from it (e.g. airport, road, port,

terminal, and rail network). The Polluter Pays Principle implies a political judgement that polluters

should pay for the damage they cause to the environment.

In road transport, for example, revenues based on the BPP and Polluter Pays Principle can

contribute to meeting road and traffic management expenditures. This creates a direct link between

those who benefit and those who pay, thereby building more transparency and accountability into the

financing system. The various forms of charges levied on road users according to these principles

include: charges for road capacity use (road tax and registration fees), charges for access to a certain

link or network (toll fee and area license fee), charges for road distance (fuel tax), charges for road

damage (vehicle weight charges and weight-distance charges), charges for road congestion (peak load

pricing or congestion taxes) and charges for environmental damage (CO

2

 emissions tax).

Road congestion charges have attracted much attention since their correct application could result

in a net benefit to society. While some motorists could be disadvantaged, society as a whole would

benefit from less congestion through more efficient use of infrastructure.  Additional benefits could

include less environmental pollution and more appropriate revenue distribution. However, only a few

countries have actually implemented such an approach to road infrastructure management.

Other logistics infrastructures may also be used more efficiently with peak load pricing. For

instance, landing and parking fees of aircraft are differentiated at congested airports.

Public acceptance of new schemes is important. Tolls, for example, are not popular in some

countries, and may face strong opposition. The process of achieving consensus needs to be carefully

managed.

Also, although new fees aim to better equalise distribution of costs and benefits within society,

optimisation of equity would be difficult, if not impossible, to achieve. The introduction of fees may

inadvertently produce other, unforeseen disparities. Compared to taxes, fees may require more

complicated administration and enforcement systems, which is another potential disadvantage to full

cost pricing.  ITS can overcome these difficulties and provide the opportunity to implement flexible

pricing schemes for road infrastructure. For example, congestion and/or parking charges could be

varied relative to the level of demand.