Explain the market failures associated with increasing transport use.

A market failure is when an allocation of resources has a negative effect on a third party that is outside the market mechanism. The third party effects are negative externalities. Increasing transport use has negative third party effects for a number of reasons:
Air pollution is produced by transport use which causes global climate change; this has negative effects on the global population due to a higher risk of extreme climates that damage economic activity. As transport use is a direct cause of air pollution and climate change, the use of transport has an indirect effect on global populations.Transport use also causes local air pollution which damages the health of local citizens, therefore third parties are affected by transport use.Transport also causes noise pollution. This is a third party effect because it can keep other people awake at night, reducing health and productivity due to others' consumption of transport.Congestion is another way transport use causes negative externalities because when one person gets in their car to go to work, they are increasing the amount of traffic on the road. This increases congestion and increases the time other people take to drive to work; reducing productivity.