Risk and irreversibility of transport interventions

Abstract

Infrastructure decisions and transport policies are often based on the notion that all decisions are made at one single point in time, based on full information and an accurate evaluation of the benefits and costs of different alternatives. The reality is very much different, especially in the transport sector, due to the complex and dynamic nature of the transport system and the interplay between the many sub-systems that comprise it. Inherent in such complexities are elements of uncertainty, risk, irreversibility, path dependency and lock-in effects. This article reviews some of the existing literature on risk and risk management. It argues that one way of better accounting for the above elements associated with risk and uncertainty is to devote efforts at the planning stage to the identification of possible unintended adverse effects, as well as during and after implementation of policy measures or policy packages. While it is imperative to address potential unintended adverse effects ex-ante, it is equally important to monitor policy measure or packages ex-post to identify unintended effects and to evaluate whether the initial objectives are being met. Since circumstances are very likely to change over time and unintended effects can arise, there is a need for flexibility in the design of policy packages to allow as much as possible changes in the package if and when intentions and outcome do not match.