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Estimating marginal external costs for road, rail and river transport in Colombia

This report presents the results of research regarding strategic freight transport network modelling in Colombia using external cost. The model uses sequential equilibrium between distribution and traffic assignment phases; it is national and inter-regional, involving strategic decision-making. The Colombian transport network consists of 27,469 km of roads, 11,257 km of navigable rivers, 2,192 km of railway lines and a set of centroid connectors for establishing a link with the zoning system (consisting of 70 internal areas and 8 external areas). Each link in a network involves internal costs: time, operation and external costs, congestion, accidents, air pollution and CO2 emissions. Vehicle ownership costs were excluded from internal cost analysis; costs such as noise, climate change and effects on the landscape were not studied in external costs. Marginal costs regarding the network were estimated by two methods. First, it was assumed that an additional unit of demand did not affect equilibrium in a transport network and then marginal cost was estimated as being the sum of marginal costs regarding links in the shortest path. The other approach assumed that an additional unit of demand changed network equilibrium; marginal costs were then estimated by calculating the difference between the two equilibrium scenarios. The methods were applied to 7 selected routes covering the most important Colombian freight transport corridors. An average 0.014 US$/ton/km rate was estimated for external costs regarding highway transport, 0.000105 US$/ton/km for water transport and 0.001625 US$/ton/km for railroad transport (preponderance of environmental costs exceeding 90%).