Economic evaluation of external costs in the project cycle

The economic evaluation of a project is nowadays a delicate task: the new cost items deriving from consideration of the socio-environmental externalities have to be added to the calculation of the more traditional technical costs. The monetary quantification of the former, together with the advancing of scientific knowledge on the environment, is subject to constant reappraisal. The literature in the field of environmental evaluation is still quite recent and sporadic, so, although some important estimative references already exist for the assessment of external costs of transport, the discipline is still evolving. As things stand today, a top priority will be to correctly consider and calculate all the budget items involved, in terms of both costs and benefits, in order to be able to evaluate the true economic advisability of the investments in terms of an environment oriented approach. Quantification of the economic consistency of the perturbative effects on the state of the environment ante quam by means of the external costs of transport (or socio-environmental costs) is the responsibility of that branch of estimation known as environmental and territorial evaluation. In order to fully integrate the environmental problems with the technical-constructive needs when building new highways, it is necessary to calculate both the technical and socio-environmental costs in the project budget on equal terms and internalize the latter within the design criteria, given that the redirecting of funds within the budget is, in reality, an environmentally-oriented investment. The assessment of the advantage of including works of environmental mitigation and then, the choice of the most suitable solutions for the context, generally both depend on the amount of the external costs of transport. However, the “environmental question” (in terms of both costs and works of mitigation) currently plays an exclusively secondary role and generally subsequent to the technical design of the infrastructures, in common practice being reflected in a clear distinction between the technical-construction costs and the external ones associated with the environment. In the same way, the environmental study on “mitigation” of the impacts produced comes after and it is separated from the technical study of designing the work. On the contrary, the new frontier of infrastructural design and, in line with this, of transport economics that justify the choices made, is to integrate at all levels the technical-economic requirements of the projects with those of the environment to be preserved, re-orientating and redirecting the economic-financial investments required anyway towards more sophisticated design solutions.