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The Internalisation of External Costs in Transport: From the Polluter Pays to the Cheapest Cost Avoider Principle

Author

Listed:
  • Dieter Schmidtchen

    (Center for the Study of Law and Economics)

  • Christian Koboldt

    (Center for the Study of Law and Economics)

  • Jenny Monheim

    (Center for the Study of Law and Economics)

  • Birgit Will

    (Center for the Study of Law and Economics)

  • Georg Haas

    (Center for the Study of Law and Economics)

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, provides 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.

Suggested Citation

  • Dieter Schmidtchen & Christian Koboldt & Jenny Monheim & Birgit Will & Georg Haas, "undated". "The Internalisation of External Costs in Transport: From the Polluter Pays to the Cheapest Cost Avoider Principle," German Working Papers in Law and Economics 2008-1-1214, Berkeley Electronic Press.
  • Handle: RePEc:bep:dewple:2008-1-1214
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    References listed on IDEAS

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    1. Nuno Garoupa, 2009. "Least-Cost Avoidance: The Tragedy of Common Safety," Journal of Law, Economics, and Organization, Oxford University Press, vol. 25(1), pages 235-261, May.
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    More about this item

    Keywords

    Cheapest Cost Avoider; Externalities; Transport;

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H - Public Economics
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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