SPECIAL REPORT/ The new head of the International Road Transport Union (IRU) has mounted a philosophical case that economic growth and transport demand are two sides of the same coin.
In a hat tip to other successful industry campaigns against climate legislation, Umberto de Pretto, the secretary-general of the International Road Transport Union, attacked the ‘polluter pays’ principle underpinning EU policy as “limited and simplistic”.
“The recent economic crisis has definitively showed us that economic growth and transport demand cannot be decoupled,” he told EurActiv in an interview.
“The main task of governments should not be limited to protecting the environment by suppressing any human activity or by suppressing road transport, upon which modern lifestyle and society depends,” he said. “Their task should rather be to optimise all economic and human activities by promoting efficiency, especially in road transport.”
Centre-right parties across Europe will fight the next European Parliament elections using variants of the theme that governments should not sacrifice business on the altar of climate change concerns.
But Christian Egenhofer, the head of energy at the Centre for European Policy Studies, told EurActiv that in reality the costs of environmental regulation to business were "very, very small".
"In the argument about reviving European economic growth, somehow the environment seems to have become a scapegoat," he said.
Studies that CEPS had undertaken for energy intensive industries and the European Commission showed that even reducing environment-related regulatory costs "would not in my opinion make Europe any more competitive," he said, adding: "The real problem with European industry – including road transport and the car industry – is that the [profit] margins are very low or non-existent."
William Todts, a spokesman for Transport and Environment, a green campaign group told EurActiv that a lot more had to be done to force heavy goods vehicles to internalise their ‘externalities’ or costs to society in the shape of pollution, traffic accidents, and noise.
“You can have both economic prosperity and lower transport emissions as the examples of the UK, Sweden, Germany and Finland show,” he said. “Their transport emissions stayed almost flat, while their economies grew by 40-55% over the past 20 years.”
The IRU says that it has reduced its emissions by 98% since 1990 and argues that ‘mega-trucks’ – vehicles that can be up to 25-metres in length – should really be called “greener trucks” because of improved cabotage designs.
A proposal on the vehicles is currently working its way through the European Parliament but looks unlikely to be passed before parliamentary elections in May 2014.
The IRU is also keenly following anticipated road pricing changes by the EU under the rubric of the Eurovignette Directive which introduced the ‘polluter pays’ and ‘user pays’ principles, in part to try to shift freight away from roads to less-polluting modes of transport such as railways.
“Every penalty on road transport is an even greater penalty on the economy and the environment as a whole,” de Pretto warned. “Making EU road freight transport more expensive will severely harm Europe’s competitiveness and cause further delocalisation [outsourcing of contracts].”
Environmental considerations have loomed large in the debates, because roadside emissions are responsible for around 12% of Europe’s carbon dioxide pollution.
Earlier this year, the EU’s European Environment Agency (EEA) called for road charges to reflect the industry’s cost to society – which it estimated at €43-€46 billion per year, in health terms alone.
“Overall, air pollution is estimated to cause 100 million sick days and 350 000 premature deaths in Europe,” the EEA found. “Such health effects also have a heavy economic cost.”
But in the absence of an EU in-depth cost-benefit analysis of the balance of loss and gain in further regulation, the road industry contends that EU policy-making is contradictory.
“The problem is that policy-makers consider the internalisation of external costs merely as a panacea and tend to apply the limited and simplistic ‘polluter pays’ principle,” de Pretto said. This was a “tax collection scheme” approach with a fatal flaw, in his view: “the decision over who should pay has automatically been taken before any cost-benefit analysis or impact assessment can occur!” he said.
Environmentalists counter that ‘Polluter Pays’ has been enshrined as a principle in EU law for over 40 years. “It’s just common sense,” Todts said.
But the argument continues over where the lines should be drawn between the needs of industry to operate at a profit and those of the EU’s citizenry for a clean and safe environment.
Business itself does not take a uniform position on the question, especially where the emerging electric economy is concerned.
“Eurelectric’s view is that, broadly, all sectors must contribute to the decarbonisation process and that electricity can provide a solution for transport,” Jesse Scott, a spokeswoman for Europe’s electricity association told EurActiv.
“Issues of competitiveness have to be looked at from a whole-economy perspective,” she said.
The IRU argues that road transport is “the backbone of the real economy” in Europe and that the industry should thus be promoted and facilitated to provide better rather than more transport.
The economic crisis slowed demand for road freight transport services, they say, in a demonstration of “the strong correlation between economic and transport growth.”
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