ESTIMATING RISK COSTS PER UNIT OF EXPOSURE FOR HAZARDOUS MATERIALS TRANSPORTED BY RAIL

This paper presents a calculation of risk costs per unit of exposure for major hazardous materials releases involving railroad transportation. Risk costs are the incremental costs incurred by railroads as a result of the presence of hazardous materials. Risk cost and other data gathered from individual railroads and other sources for the 1982-1992 period were used to calculate risk costs per unit of exposure that are applicable to current railroad traffic. For the seven environmental/safety commodity categories designated in this study, the risk costs per unit of exposure for the most hazardous commodities were five to ten times greater than those of most other commodities, and 100 to 200 times greater than those of the least hazardous commodities. The risk costs per unit of exposure for the most hazardous commodities can represent more than 13 percent of the cost of a typical movement.