PLANNING FOR A SUSTAINABLE EUROPE? - TU Berlin

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In examining the difficult question whether investments in large-scale transport
links bring economic development benefits, both costs and benefits therefore need to be
carefully assessed on a case-by-case basis. Even if an investment comes up positive in
the end, this still only means that from the perspective of the project promoters, the
benefits were greater than the costs. There still might be losses. And depending on the
inclusiveness of the cost-benefit methodologies employed, significant losses may be
externalized. Often economic benefits are reaped at the expense of greater environmental
impacts, such as air pollution, which raise health care expenditures.
Interestingly, the narrowness of cost-benefit approaches has been attacked from a
number of different camps, and often for opposite political reasons. Environmental
externality scholars attack cost-benefit analysis not for the benefits but for the costs that
remain unaccounted for in traditional analyses. In the case of new toll roads, for
example, environmentalists attempting to block investments will point to increasing
traffic congestion and raising pollution on parallel networks due to shifted traffic onto
(toll-free) roads. Meanwhile, investment boosters attempting to leverage additional
highway investments that cannot be justified by narrow project analysis alone will attack
cost-benefit analysis for not counting macro benefits. Rural politicians are still
particularly prone to hold on to the mistaken notion that roads alleviate poverty by
automatically bringing employment and growth. It should also be noted that as long as
the external costs of transport, particularly for freight, remain as highly externalized as in
Europe (see especially Teufel 1989), easier transport access is likely to allow
manufacturers to use production inputs from more and more distant places. The longer
the distances traveled, the larger the environmental impact. The irrationality of using