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The internalisation of external costs in transport: from the polluter pays to the cheapest cost avoider principle

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  • Schmidtchen, Dieter
  • Koboldt, Christian
  • Monheim, Jenny
  • Will, Birgit E.
  • Haas, Georg

Abstract

The European Commission mandated the consulting firm CE Delft to develop a framework for the internalisation of external costs and to devise a number of potential internalisation scenarios for further analysis. The results of their preliminary research are published in a CE discussion paper, and the Commission is now formulating draft legislative proposals which will be subjected to a consultation of stakeholders. The present report offers a critical assessment of the above mentioned CE study, providea a theoretical examination of the relative strengths and weaknesses of the polluter pays principle and the cheapest cost avoider principle in relation to the problems arising in the road transport sector, demonstrates how the cheapest cost avoider principle can be applied in practice by providing examples of external costs in road transport, and puts forward recommendations for the appropriate principles that should guide the Commission's further activities in this area. --

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Bibliographic Info

Paper provided by Saarland University, CSLE - Center for the Study of Law and Economics in its series CSLE Discussion Paper Series with number 2007-03.

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Date of creation: 2007
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Handle: RePEc:zbw:csledp:200703

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Keywords: Cheapest Cost Avoider; Externalities; Transport;

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  1. Schelling Thomas C., 2007. "Climate Change: The Uncertainties, the Certainties and What They Imply About Action," The Economists' Voice, De Gruyter, De Gruyter, vol. 4(3), pages 1-5, July.
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  12. Burrows, Paul, 1999. "Combining regulation and legal liability for the control of external costs," International Review of Law and Economics, Elsevier, Elsevier, vol. 19(2), pages 227-244, June.
  13. Enrico, Baffi, 2007. "The Problem of Internalisation of Social Costs and the Ideas of Ronald Coase," MPRA Paper 7277, University Library of Munich, Germany.
  14. Martin L. Weitzman, 2007. "A Review of the Stern Review on the Economics of Climate Change," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 45(3), pages 703-724, September.
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