IRU Position on a modern economic theory for the internalisation of external costs, (2008)

The effective internalisation of transport’s external costs requires sound cost-benefit analyses. Charging should be applied to all transport modes and revenues from road charging earmarked for the road transport sector, rather than lost in the overall state budget and inefficient transport modes. The IRU considers that the Polluter Pays Principle (PPP) is not an adequate response to the internalisation of external costs, as it is economically outdated, and environmentally misguided. Instead, the IRU recommends applying the Cheapest Cost Avoider Principle (CCAP) to ensure economic growth and remain competitive.