Your argument only holds where prices reflect the real (internal + external) cost. Otherwise you are bound to market failure (which has already happened to the transportation market).
The values are entirely on paper. It's a comparison you make when deciding how to allocate funding.
Politicians obviously and frequently don't get the math right (or even do the comparison), but that doesn't affect what they should do if they were making better policy choices, or what voters should ask for if they're doing the numbers.
It is a bit more complicated since car drivers don’t pay for most of the externalities of driving. If you take individual car traffic as a given, I agree.
Externalities are a separate thing. They have a cost, but internalizing them also has a cost in overhead and enforcement etc. For large externalities that's worth it, for small and diffuse ones it often isn't because the cure is worse than the disease. It does you no good to spend $100 to prevent $50 in harm.
1. taxes - I pay hefty taxes on fuel (in the UK) and tax on owning a car
2. insurance - I have to have an insurance policy that will pay for any damage to third parties. The payment for those externalities is pooled, but paid.
Not perfect, and not entirely, but a lot of it is paid.
Yeah the fuel price sucks. In germany car traffic is highly subsidised. It doesn’t even pay for the infra it needs. Probably the situation in the uk is not that different.
