Financing Transport Projects: Why integrating externalities matters for decision making

This briefing paper analyzes the importance of integrating externalities into financial analysis to improve decision making for infrastructure transport projects.Transport is a crucial part of modern society, connecting communities and fostering development. However, the impact of the transport sector on the planet is huge, causing over 20% of global carbon dioxide emissions. It is therefore one of the main drivers of climate change while also having significant impacts on human health.Financial decision-makers have the power to use investment to build better, greener transport. However, conventional financial analysis is inadequate in capturing the intricate dynamics of the modern world, as demonstrated by the surge in environmental challenges, social inequalities, and cyclical financial crises.