"GRACE": Generalisation of Research on Accounts and Cost Estimation

Bestandsaufnahme und Fortschreibung der Forschung über Rechnungswesen und Kostenschätzung im Transportsektor


Sixth Framework Programme Priority [Sustainable Surface Transport]

Applicant: DG TREN Directorate General for Energy and Transport (European Commission)
Time Schedule: 

July 2005 - March 2008

Homepage of GRACE
Final Report


Project consortium

The GRACE Project consists of 15 partners, which are all based in the EU. The project work is divided into 7 work packages. The project co-ordination is carried out by the Institute for Transport Studies at the University of Leeds.

The consortium

Participant name


Institute for Transport Studies, University of Leeds           




University of Antwerp






Katholieke University of Leuven




Aristotle University of Thessalonika




Institute for Regional Research (IfR), University of Kiel




IER University of Stuttgart


TNO Inro


EIT, University of Las Palmas


University of Gdansk



General project objectives

GRACE aims to support the development of sustainable transport systems by facilitating implementation of transport pricing systems that reflect the costs of infrastructure use.  Its objectives are:

  • to undertake new case study research to address gaps in the existing level of knowledge of marginal social costs in road and rail transport – particular attention will be given to specific aspects, namely infrastructure wear and tear, road congestion, rail scarcity costs, accidents, air pollution and global warming, noise nuisance and environmental costs in sensitive  areas.
  • to undertake new case study research to address gaps in the existing level of knowledge of marginal social costs in air and water borne transport – particular attention will be given to all cost categories;
  • to develop and refine the methods of using transport accounts to monitor the implementation of transport pricing reform in an enlarged Europe – in particular to apply results from case studies to split between fixed and variable costs, to close gaps in the accounts, especially for air transport and waterborne transport and to provide qualitative and quantitative inputs for the generalisation of marginal cost case studies (cost drivers);
  • to undertake innovative research on the issue of the appropriate degree of complexity in transport charges, to provide guidance on the effective trade off between pricing systems that give appropriate incentives by portraying variations in marginal social cost in time and space in detail and pricing systems that are easily understood and acted upon.
  • to provide clear guidance on  the marginal social cost of the different modes of transport in specific circumstances and on simple and transparent methods for determining charges - this will involve bringing together results of previous research on costs, cost drivers and cost functions and the production of a software tool designed to enable derivation of costs and charges  even in situations where detailed analysis does not exist.
  •  to refine the use of models to address the broad socio-economic impacts of pricing reform – particular attention will be given to modal shares, accidents, sensitive areas, regional economics and equity issues.
  • to draw clear conclusions and recommendations for policy and for research in the field of transport infrastructure costs and charges.


These objectives will be pursued within a set of six inter-related workpackages, one per objective, each lead by internationally recognised experts in the field and involving a highly experienced team.  In addition, there will be a workpackage dedicated to project management and another to synthesising the overall project conclusions and recommendations.

The research will contribute to strengthening the scientific and technological capacities needed for Europe to be able to implement a model of sustainable development in the short and long terms.  The proposed project integrates the social, economic and environmental dimensions of sustainability and contributes to international efforts to mitigate the adverse trends in global change by providing the research required to facilitate a step change in the efficiency of the transport sector. 


Relevance to the objectives of the addressed priority thematic area


The goals of the project are highly relevant to the objectives of this thematic priority.  The research will contribute to strengthening the scientific and technological capacities needed for Europe to be able to implement a model of sustainable development in the short and long terms.  It will provide policy-makers with new and refined information on the costs of transport infrastructure use and on the presentation and use of this cost information within transport accounts so as to enable policy-makers to develop and implement transport policy which meets with the principles of sustainable development.  In particular, the cost information will facilitate the implementation and monitoring of more fair, efficient and sustainable charges that are based on costs, within the transport sector.  It will also provide means of generalising cost research so as to estimate transport costs where data is insufficient or inappropriate for the task.  It will provide new and refined methodological insights into the estimation of transport costs which can be implemented on a more wide-scale basis throughout the EU at the national, regional and local levels in order to support transport policy-making.

The project integrates the social, economic and environmental dimensions of sustainability.  The cost estimation and accounts work examines the economic and social costs of transport, encompassing environmental costs as a major component.  Furthermore, the investigation of complex charging systems examines directly the trade-off between economic principles and issues of social acceptability and behaviour.  A third key way in which the social, economic and environmental aspects are integrated is within the work to analyse the socio-economic impacts of more fair and efficient transport charges, based on the costs imposed.

The project contributes to international efforts to mitigate the adverse trends in global change by providing the research required to facilitate a step change in the efficiency of the transport sector.  Transport is one of the most significant factors affecting trends in global warming, population shift, development and land-use planning so a more efficient transport sector – where costs, benefits and charges are better understood and reflected within policy – contributes to the mitigation of these trends.  International, national, regional and local policy-makers will be able to draw upon the project’s findings when developing and implementing transport policy, so that policy promotes greater efficiency within the sector and, ultimately, promotes increased sustainability.

Furthermore, the project objectives are closely related to the priorities of the Call for Proposals, and to the objectives of the Common Transport Policy.  There is a clear emphasis on intermodality through comprehensive coverage of passenger and freight modes.  The project provides strategies and information for development of sustainable transport policy solutions.  Due to the project’s emphasis on building upon the state-of-the-art and delivering quantitative results, it has a clear policy-driven agenda.

By providing a sound empirical basis for charging policy development using information on all financial, economic and environmental impacts, the project will support the development of sustainable, economically efficient and safe transport systems.


The expected results corresponding to the main project outputs are:

  • The marginal cost estimates – will support the work of the Commission, being used to inform the structure and level of charges; in the longer term this will result in more fair and efficient charging systems.
  • The development of transport accounts – will make transparent the relationship between costs, revenues and benefits, providing policymakers in transport and finance departments at the national, regional and local levels with enhanced information on which to determine the future direction of transport sector charging;
  • Guidance on levels of complexity – will provide policy-makers with enhanced information on whether and where it is appropriate to reflect the complex nature of marginal cost estimates within the levels and structures of charging regimes;
  • The framework for generalisation – will inform policymakers about the drivers of transport costs and guidance on charge-setting where full estimation of costs is not appropriate; and
  • Guidance on impacts – will provide policy-makers enhanced information and forecasts of the socio-economic impacts of introducing more fair and efficient charging for transport infrastructure use.


Contribution of the Institute for Regional Research (IfR), University of Kiel

Project leader: Prof. Dr. Johannes Bröcker

Project staff: Nils Schneekloth, Artem Korzhenevych (project research)

The Institute for Regional Research as partner of the GRACE consortium contributes to work package 6, which aims at testing the socio-economic effects of different pricing and investment rules: partial equilibrium effects, general equilibrium effects, spatial effects (different regions, peripheral vs. central regions, sensitive vs. other areas), and equity effects, to explore the coordination of transport policies between different government levels and to refine existing modelling techniques. The work on the spatial computable general equilibrium model, CGEurope, in this projects aims at estimating regional employment effects resulting from policy scenarios on marginal cost transport pricing. One of the biggest political concerns about possibly harmful effects generated by marginal cost pricing is that peripheral areas suffering from high unemployment rates will carry an extra burden if private transport costs increase due to internalising external cost in form of higher private transport costs. In fact, as unemployment rates vary strongly across regions in Europe, the regional employment impacts can be considerable and in some case undesirable. The factor market module of the model will be improved, that two factors will be introduced, labour and a combined service of all other factors and second, the labour market has to be modelled as a market not perfectly cleared by flexible wages. This is modelled by assuming a wage curve for each region, an inverse relationship between wage and unemployment.