Financing Transport Projects: Why integrating externalities matters for decision making

The document highlights that conventional financial analysis fails to capture the environmental and social impacts of transport projects, which contribute over 20% of global carbon dioxide emissions. It advocates for a holistic approach that accounts for externalities—such as public health benefits from improved air quality or costs from vehicle emissions—to better determine a project's overall value. The briefing also references several Sustainable Asset Valuation (SAVi) case studies involving electric vehicles in India, non-motorized transport in Coimbatore, wind portfolios in Germany, and bus electrification in Mongolia.

• Conventional financial analysis is insufficient for modern infrastructure decision-making because it fails to account for environmental challenges, social inequalities, and financial crises, leading to continued investment in carbon-intensive road transport instead of sustainable options.
• The transport sector is a primary driver of climate change and negatively impacts human health, accounting for more than 20% of global carbon dioxide emissions.
• Integrating externalities—defined as costs or benefits affecting third parties, society, or individuals—allows decision-makers to understand a project's total value, such as weighing the health benefits of improved air quality against the costs of vehicle emissions.

APA

Carlucci,, E. (2024). Financing Transport Projects: Why integrating externalities matters for decision making. International Institute for Sustainable Development. https://www.iisd.org/publications/report/financing-transport-projects

Chicago

Carlucci,, Edoardo. Financing Transport Projects: Why integrating externalities matters for decision making. International Institute for Sustainable Development, 2024. https://www.iisd.org/publications/report/financing-transport-projects.

Wikipedia

{{cite report |last1=Carlucci, |first1=Edoardo |title=Financing Transport Projects: Why integrating externalities matters for decision making |publisher=International Institute for Sustainable Development |date=6 March 2024 |url=https://www.iisd.org/publications/report/financing-transport-projects |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{carlucci2024financing, author = {Carlucci,, Edoardo}, title = {{Financing Transport Projects: Why integrating externalities matters for decision making}}, institution = {International Institute for Sustainable Development}, year = {2024}, month = mar, url = {https://www.iisd.org/publications/report/financing-transport-projects}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }