A third point that needs to be emphasized is that external costs are, by definition,
costs borne by others. These others can be the neighbourhood, the rest of the country,
the continent, the world or the coming generations. As each government level will, in
general, only take into account the welfare of the inhabitants of its constituency, it will
only take into account the external costs that are borne by these inhabitants. Therefore
splitting the external costs in function of the population they affect is useful informa-
tion*.
Table 1 gives an overview of the different categories of marginal social costs examined
in this paper. They include the marginal external congestion, air pollution, noise and
accident costs. All cost functions apply to an urban environment. Their use is illustrated
for the urban area of Brussels. The marginal external costs are determined for different
transport modes: cars, buses, trams, metro and trucks. The methodology is described in
detail and applied for the transport situation of 2005, assuming that there is no policy
change. At the end of the paper, a comparison is made between the marginal external
costs in 1991 and 2005. A detailed description of the prevailing transport situations is
offered in Ochelen and Proost (1995)t. Transferable results of the ExternE projectf have
been used in this study as much as possible.
In the next chapters, we discuss the different types of external costs4 one by one.