"Paying the full costs of transportation may have many benefits, but the costs may not be of a magnitude to change land use decisions significantly," said Gerard McCullough, director of CTS and one of the speakers in the "Research Forum on the Costs of Transportation" held on March 31.

The event began with a presentation by McCullough and David Anderson of CTS on "The Full Costs of Transportation in the Twin Cities Region." The presentation focused on the first phase of their research in which they calculated the full social costs of regional travel for 1998 and projections for 2020, and organized the results in a framework designed to be useful to policymakers.

Using data from the Metropolitan Council and Mn/DOT, they analyzed three types of costs: government costs (e.g., roads, highway patrol); internal costs (those borne by the person using them, e.g., fuel, auto cost and depreciation); and external costs (those not borne by the person causing them, e.g., noise, pollution). Some of their results:

• *The midrange estimate of the full, per vehicle cost for 1998 is $8,750 ($7,410 internal costs, $815 governmental, and $525 external). Full costs are expected to increase to $10,025 in 2020 ($8,365 internal, $960 governmental, and $700 external).
• The major external costs were from crashes, congestion, and air pollution.
• Per capita external crash costs, which result from not fully compensating nonmotorists and victims in crashes, are not predicted to change significantly.
• Congestion costs are expected to grow by five percent per year, continuing a national trend that began in the 1980s. Congestion costs will overtake crash costs as the largest external cost of travel by 2020.
• Although vehicle miles traveled are expected to rise from 65 to 90 million, emissions control technology is expected to improve enough so that the total costs of air pollution are not projected to increase significantly by 2020.
• Researchers have not yet fully evaluated transportation's impacts on water pollution; McCullough and Anderson will explore this area in future research.

Next on the agenda was a presentation by James W. March, chief of the systems analysis team in the FHWA's Office of Transportation Policy Studies, on "Environmental and Other Social Costs of Highway Use." March provided a national perspective on the costs of transportation using data collected and analyzed for the 1997 Federal Highway Cost Allocation Study.

Nationwide, congestion costs are now estimated to be over $60 billion annually. "These costs are borne by motorists, who do not perceive full costs when making driving decisions," March said. Dwarfing this number, however, are safety (crash) costs, at $340 billion. The costs of air pollution are "difficult to measure because they vary greatly by area, depending on factors such as climate, topography, and other sources of pollutants." Overall study conclusions include:

• External costs of highway use are large, but the ability to reduce those costs through federal user fees is limited.
• Temporal and geographic variations in environmental and congestion costs make local pricing options more effective.
• Much is already being done to mitigate external costs through programmatic and regulatory initiatives.

The forum closed with a panel session moderated by Abby McKenzie, Mn/DOT Office of Investment Management, and featuring McCullough, Anderson, March, and John Brandl, dean of the Humphrey Institute.

Commenting on McCullough and Anderson's research, Brandl observed that internal costs are significantly greater than governmental and external costs combined. From this he concluded that "even if external costs are internalized, people will keep driving cars." For researchers, this highlights the need to improve cost estimates and ensure that all external costs, such as global warming, are considered. For policymakers, it means that merely internalizing costs will not bring large social benefits. Policymakers must find new ways of pricing transportation--ways that will affect behavior so as to mitigate external costs.