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Reduction potential of external costs of motorized individual mobility by the promotional programme VEL 2 in the Canton Ticino

Switzerland Flag
Complete with results
Geo-spatial type
Network corridors
Project Acronym
SVI 2001/535
STRIA Roadmaps
Transport electrification (ELT)
Transport mode
Road icon
Transport policies
Environmental/Emissions aspects,
Societal/Economic issues
Transport sectors
Passenger transport,
Freight transport,


Background & Policy context

In modern societies spatial mobility of persons and goods has gained an undeniable importance. It also is one of the human activities with the highest effects on the environment and the most important single factor of anthropogenic climate change. The emissions caused by traffic also affect human health and buildings and ecosystems get badly damaged. Reducing negative traffic impacts is a difficult political task as well as a tremendous social challenge.

Different economic analyses give a rough idea of the extent of economic costs as due to traffic which ensue for the population of Switzerland. Recent studies assert annual costs of about 5 billions CHF a year caused by terrestrial traffic on road and rail alone. The most important fields regard health costs caused by airborne emissions and noise, by accident and damages on buildings and ecosystems. This account however does not include either the consequences of putative climate changes or infrastructure costs. In fact all these costs are not covered by those who caused them and they are therefore called external costs. For years welfare economists have been pleading for the application of the "polluter pays principle" of internalisation of external costs, in order to reduce traffic volume and environmental impact on a socially optimal level.

The promoting of efficient and alternative engines is a further option for the reduction of environmental impact caused by traffic. These measures have a considerable reducing potential with respect to negative traffic impacts, because they do not interfere with habits and mobility patterns. In mid 1995 a pilot and demonstration project (VEL1) was started in Mendrisio (a town in the Canton of Ticino). The scope of this project was to promote and test electrical light vehicles in everyday traffic conditions. In 2001 this project was expanded in two directions; hence including efficient vehicles with less than 120g of CO2-emissions per kilometre as well as being extended over the whole region of the Canton Tessin (VEL2).

Several technical, social and mobility-related aspects of this programme have been investigated in detail, so far. The present study is focused on the external costs of motorised individual mobility and the possibilities of reducing them by efficient vehicles, electric vehicles and electric scooters.


The goal of this study was to quantify the external costs, which can be saved by energy efficient and environmentally friendly vehicles in the realm of the VEL2 promotion programme in the Ticino canton (VEL2 programme: promotion of electrical lightweight vehicles and efficient fuel driven cars).

The study aimed to show the relationship between external and private costs, which is important in order to offer to the consumer a comprehensive basis to make his choice.

Besides the analysis of existing studies on external costs and the examination of different calculation approaches the study has to evaluate the significance of the approach of internalisation of external costs in the environmental and transportation debate.

In particular, the study examined the relevance of the external costs for the proposed bonus malus system of the succeeding programme VEL 3. This includes the analysis of the opinion of various stakeholders. The project concludes with some policy recommendations.


The project started with an analysis of the existing studies on external costs and evaluates the possibilities to apply them to the present example. On this basis those approaches are chosen, which seem to fit best to the conditions of Ticino.

The project presents estimates of the external as well as private costs per vehicle and unit of driven distances, in order to offer to the consumer a comprehensive basis to compare the different cost components of individual mobility. Furthermore, the significance of the internalisation of external costs in the environmental debate is discussed with different stakeholders. Finally, the results of these discussions are included in the conclusion concerning the integration of external costs for the proposed bonus malus system and are used to formulate policy recommendations for the succeeding programme VEL 3.


Parent Programmes
Institution Type
Private foundation
Institution Name
Association of Transportation Engineers
Type of funding
Public (national/regional/local)


In 2003 individual road traffic in the Ticino region caused overall external costs - referring only to air, noise and climate - of about 74 million CHF (including motorcycles). If the higher unit cost rate for climate change impacts is taken into account the external costs rise to about 118 million CHF.

However, the main goal of the study was the assessment of the external costs which could be saved thanks to the financial promotion and activities in the realm of the VEL2 project. The amount of these savings depends on particular on the different assumptions regarding vehicle performance and substitution effects by the VEL2 project itself. The reduction is given by different substitutions expressed in the differences between the assessments of the various external costs of each vehicle category. If, for example, all circulating electrical vehicles had replaced diesel engine vehicles, the external costs saved would have accounted to about 85,000 CHF.

The real substitution effects of efficient vehicles or electrical vehicles have been analysed for a sample of the VEL2 vehicle fleet. The assessment of the overall effect, however, is based on a slightly more optimistic hypothesis, assuming that the electrical vehicles replaced conven-tional gasoline and diesel driven vehicles in equal proportions. Furthermore, it has been as-sumed that electrical scooters replaced conventional motorcycles. The savings that can be derived from these assumptions account for roughly 284,000 CHF in 2003. The overall saving effect of about 680,000 CHF, achieved by the efficient and the electro-vehicles matriculated in 2003 during the period of 8 years, corresponding to 70% of the investment in the promotion of these vehicles in 2003. Using the lowest external costs would reduce this amount to less than its half. In this respect we must underline that the utility of promoting efficient vehicles cannot be measured exclusively by external costs saved, since the scope of the whole promo-tional programme VEL2 was, first of all, much more comprehensive and intended to foster a social innovation and learning process in a very difficult field. Secondly, the effects of the programme will last even after the end of the promotion programme in 2005.

Results of the stakeholder analysis:

The significance of external costs in the transport and environmental policy debate as well as the possibilities of continuing VEL2 on the basis of a modified vehicle tax are being discussed in the last part of the study with a n

Policy implications

  1. The significance of legal emission limits and of the impact of the induced technical innovations is emphasized by the different results. The transition to EURO 4 vehicles under-lines the consistent tendency to strongly reduce air pollution emissions since 1980. However, this tendency does not apply to either energy consumption or CO2-emissions which increas-ingly evolve into central problem of traffic pollution.
  2. The political necessity of introducing legal emission limits for particle emissions contained in the exhaust of diesel engines as well as efficient measures to tackle growing CO2-emissions emerge. These CO2-emissions are becoming the crucial issue in the whole debate and it is unlikely that the measures linked to the Swiss energy efficiency label for cars ("Energie-Etikette") are sufficient in this respect.
  3. The study indicates that each promotional programme aiming at the reduction of environmental impacts should take into account different criteria. Thus simply promoting diesel engines in order to reduce CO2-emissions for the sake of reducing the risk of climate change proves to be rather dangerous as the promotion is not yet related to the introduction of particle emission limits.

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