Leading article: Sir Rod, too, makes the economic case for environmental radicalism

His recommendations have the authority of someone who understands the impact they would have

Sir Rod Eddington, the former chief executive of British Airways, would not be most people's idea of a green radical. But his report on the future of the UK transport system, published yesterday, nevertheless comes to some rather radical conclusions.

The report, commissioned by the Chancellor, Gordon Brown, last year, argues that the Government should establish a system of road tolls and pricing by 2015 at the latest. The proceeds from the new system should be ploughed into improving bus, tram and rail services. The alternative, claims the report, is a debilitating rise in congestion and massive economic waste. Sir Rod also argues that the grave threat of climate change demands that users of cars, planes and trains must be charged according to how much carbon they pump into the atmosphere.

This is, of course, another welcome recognition of the principle that the true costs - by which we mean the environmental impact - of different methods of transport should be reflected in the price. Transport is responsible for a quarter of all UK carbon emissions, and is the fastest rising source of emissions within the economy. A transport system constructed on the principles of the Eddington report would be environmentally sustainable. Persisting with the present model is likely to result in disaster.

There would inevitably be resistance. The Federation of Small Businesses, among others, wasted no time in criticising the Eddington proposals yesterday, arguing that road charging would ruin many small businesses and damage the UK's overall economic activity. But what such critics fail to acknowledge is that rising congestion on the roads already poses a threat to economic activity. According to the Eddington report, a mere 5 per cent reduction in journey time for all business travel on the roads could generate around £2.5bn in costs savings every year for Britain. This waste will only get worse as congestion continues to rise.

A shift in public attitudes is needed. We need to get away from the idea that soaring pollution and an ever-rising number of cars on the road are a symbol of economic prosperity. But it is vital that the Government takes a lead. The neglect of the transport sector since 1997 has been a disgrace. Virtually every target set out by the John Prescott's 10-year-plan for transport six years ago have been dropped. Outside London, bus passenger numbers are falling and fares rising. Travelling by rail between cities is still prohibitively expensive and complex to book. People are returning to the railways, but nowhere near as many as the Government promised.

The Eddington report is not without flaws. Sir Rod recommends the expansion of international "gateway" airports such as Heathrow - something that would surely only attract a greater level of aviation traffic. Sir Rod argues against "grand futuristic plans", such as a high-speed railway line between London and Scotland, on the grounds that improving the performance of existing transport networks would be preferable. The truth is we need both.

Yet perhaps the most significant aspect of this report is not what it says - but who authored it. Sir Rod comes from the worlds of business and transport. His recommendations have the authority of someone who understands the impact they would have. It is also interesting that, like October's report by Sir Nicholas Stern, Sir Rod makes a strong economic case for radical action. Here is yet more welcome evidence that the issue of climate change has transcended the world of environmental pressure groups and entered the world of economics and business.