Pricing of environmental impacts of emissions from road traffic — recent and present research in Finland

This paper presents the results from the Report and the Proposal of the Working Group on Pricing of Traffic Noise and Exhaust Gases established by the Finnish National Road Administration in 1990. Based on the studies made, the Working Group has estimated the cost of damage caused by traffic noise and exhaust gases in Finland in 1989. The costs were calculated based on the economic losses caused by different kind of damage, excluding costs caused by climate changes, which were assessed by economic instruments needed to halt the growth of emissions. Owing to the shortage of precise information, several assumptions and generalizations had to be used for cost estimation. The costs of the damage caused by traffic noise and exhaust gases in Finland in 1989 amounted to FIM 4.5 billion, of which exhaust gases accounted for FIM 2.9 billion and noise FIM 1.6 billion. The costs caused by climate changes accounted for FIM 1.5 billion of exhaust gas costs. The total cost of traffic exhaust gases was used to determine the costs caused by different air pollutants. On the basis of this information and the safety coefficient, preliminary unit prices of exhaust gases were calculated. The costs of exhaust gases of vehicles without catalytic converters are on the average 6.5 p/km in road driving and 7.0 p/km in city driving. Emissions from vehicles with catalytic converters compared with existing vehicles are 70–80% lower, and correspondingly the costs of exhaust gases are also lower. The costs of existing heavy vehicles are on the average 27 p/km in road driving and 32 p/km in city driving. Emissions from heavy vehicles are expected to drop by 50–60% from the present level, and the emission costs of vehicles will also fall.