"For efficiency as well as for fairness purposes, the costs and nuisances related to transport activities should be borne to a large extent by those who produce them," the European Commission states in its consultation document.
The International Union of Public Transport (UITP) agrees that the financial cost for using different transport modes should reflect their real cost to society, particularly as regards cars: "The poor contribution of private car usage to covering the external costs it produces creates a situation of unfair competition with the 'softer' modes of urban transport (public transport, cycling and walking)."
It therefore calls on the Commission to target private car use and parking. "Public transport should be exempted of tax burdens and should benefit from the revenue of hypothecated taxation on indirect beneficiaries," it adds.
It also asks the Commission to stop focusing solely on long-distance transport and freight – as the current Eurovignette Directive does – because the majority of transport-related external costs are related to passenger traffic in urban areas.
However, the European Association of Automobile Manufacturers (ACEA), the European Road Federation (ERF), the International Tourism Alliance (AIT) and the International Automobile Federation (FIA) argue that "motoring already pays for itself". They say existing taxes, including fuel and vehicle registration and ownership taxes, reach over €360 billion – easily covering the costs inflicted by road users. Thus, if market measures are taken to make up for emissions of CO2, current taxes that are not based on external cost estimates should be scrapped, they say.
The road industry also insists that only CO2 be considered as an external cost to society, because internalising the marginal costs of accidents and congestion "is neither feasible nor the most efficient instrument available to deal with these serious social issues".
A study prepared for ACEA explains that increasing the cost of using cars would have no impact on road safety because the "probabilistic nature of car accidents" goes against the "rationale of internalisation to make economic agents aware of the costs they inflict upon society and induce them to modify their behaviour".
What's more, the road industry says that the benefits generated by transport, including job creation, trade, competitiveness, social cohesion and poverty alleviation, should be integrated into cost calculations.
It also insists that any income raised from road usage be invested back into optimising road transport. "We are against cross-subsidising, where all the income from the road sector is used to invest even more massively into the rail sector. We simply cannot allow that when there are still so many roads in Europe that need improving," the ERF told EURACTIV.
The Community of Railways (CER), the European Rail Infrastructure Managers (EIM) and the European Transport Workers’ Federation (ETF) say the current non-application of the 'polluter pays' principle "has significantly hampered the ability of the rail sector to operate under fair conditions, as well as to finance investment itself".
“Rail is currently one of the modes of transport which produces the least external costs. Cars create three times as much external cost as trains and aviation more than twice as much. Yet costs such as congestion, accidents, noise, global warming and air pollution, are not incorporated into the price for mobility,” complained Chairman of the European Railway Industries (UNIFE)
Despite this, the associations point out, charges on roads "are either cheaper than or approximately as expensive as charges for access to the rail infrastructure. This provides little incentive for logistic operators to use rail rather than road over long distances; railways are at a competitive disadvantage."
The EIM also notes that, while rail is taxed under the EU's Energy Taxation Directive, aviation is exempted from energy taxes. "This unsustainable and unfair fiscal treatment should be discontinued," it insists, adding: "The unfair treatment for rail is made even worse through its inclusion in the EU Emissions Trading Scheme, which does not affect road and air transportation."
The rail sector thus calls on the Commission to come up with a pricing model that reflects all external costs, and where cross-modal financing is "clearly established as a key principle", in order to allow for further investments in railway infrastructure and achieve "the required increase in volume of transport by rail".
However, airlines retort that most plane journeys cover either long distances or short ones counting natural obstacles, for which there are "no realistic alternatives". "Therefore, any comparison of CO2 performance between transport modes is irrelevant as they accomplish different missions and meet different demands," stresses the Association of European Airlines (AEA).
It adds that encouraging a modal shift "cannot provide a proper solution to the global problem of climate change, nor can it resolve the local issue of airport congestion".
The International Air Transport Association (IATA) further notes aviation's "significant progress" towards reducing its environmental and social impacts, and the "substantial positive externalities" the sector generates by paying in full for the building, maintenance and use of its infrastructures – thus "connecting many industries within the national economy and to the wider global economy".
"Aviation makes the highest net contribution of all modes when expressed in terms of passenger journeys", whereas rail and light rail (urban transit) networks make a negative net contribution, because they are heavily subsidised and fail to cover their infrastructure costs, states IATA.
Airlines therefore reject any form of cross-subsidisation where rail companies would receive additional government subsidies, paid for by the aviation sector.
The looming airport capacity crunch is also a matter of concern for airports. ACI Europe Director General Olivier Jankovec says optimising capacity "will be far from sufficient to cope with traffic demand over the next 20 years. Airports must be permitted to plan, finance and build in time the new facilities that are needed to respond to airlines' and passengers’ needs. This is a prerequisite not only for the competitiveness of Europe's aviation industry, but also for that of Europe's economy, in line with the Lisbon Strategy."
The European Federation for Transport and Environment (T&E) rejects the argument that that transport is already heavily taxed, saying that total taxes for transport, which it estimates at less than €400 billion, "only recoup about half of the total social costs", which include external costs and subsidies received by each transport mode, and are estimated at as much as €923 billion or 9% of EU GDP. "The use of Market Based Instruments is necessary to close the baffling €500bn gap between social costs on the one hand, and taxes and charges of the other hand," it insisted.
In response to calls for additional infrastructure for road and air transport, CEE Bankwatch Network, an NGO monitoring the activities of international financial institutions notes: "It is impossible to build one’s way out of congestion," adding: "Building road infrastructure inflates transport demand just as printing money creates inflation."
"The fear that controlling traffic growth may be detrimental to competitiveness also needs further examination in the light of rising oil prices. 71% of all oil consumed in the EU is used by transport: 60% of all oil consumed in the EU is used by road transport alone, with 9% by air transport," it stresses in a report entitled 'Lost In Transportation'.
It thus calls on the European Investment Bank – which it claims lends three times more to the car industry than to other industrial sectors – to put an end to its "planes, loans and automobiles culture" and "stop pouring financing into new capacity for those modes", saying that: "making investments into energy-intensive modes of transport now is likely to prove poor value for money in the near future."