What can be done to ensure that transport decisions take into account the environmental costs of a journey? Dr Jillian Anable UK Energy Research Centre The Centre for Transport Policy The Robert Gordon University

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What can be done to ensure that transport
decisions take into account the environmental
costs of a journey?Dr Jillian AnableUK Energy
Research Centre The Centre for Transport
PolicyThe Robert Gordon University
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Presentation structure

1. Introduction
2. Social Dilemmas
3. What are the environmental costs of a journey?
4. What do people pay already?
5. What do people think they pay already?
6. How could they be made to pay more?
7. Points for discussion

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Introduction

• Attempts to change the price signals have failed
• Practical and political difficulties in using
  economic instruments
• Policy has shifted from attempting behavioural
  change to tax concessions on cleaner vehicles and
  funding public transport
• YET research shows the impossibility of
  sustainable mobility without efficient price
  signals

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SOCIAL DILEMMAS
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External costs of transport
Non-market Air pollution Noise Waste pollution Waste disposal Accidents Congestion Community severance Land use impacts other health Resource consumption
Market Operating subsidies Accidents Parking Congestion Road infrastructure Land value Resource consumption other health Land use impacts
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Implications of under-priced transport

• A major portion of transportation costs are
  external, fixed or non-market.
• Magnitude of non-market costs is significant
  compared with other costs and benefits normally
  considered in transport decision making.
• Users perceived costs are lower than the costs
  they impose
• Underpricing leads to inefficiency, urban sprawl,
  congestion, energy use and reduces travel choice

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Can we put a price on it?

• Samsom et al
• The external costs of motoring, including
  congestion, road maintenance, air pollution, road
  crashes, noise and climate change, average
  21p/mile, rising to 1/mile in London.
• BUT
• This figure underestimates the effects of climate
  change

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The cost of carbon

• Samson figures were based on 7.30 - 14.60 per
  tonne carbon dioxide
• Official government figure is between 40 and
  160 per tonne i.e around 5 times greater

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If the price is right

• Speed up the introduction of cleaner and
  fuel-efficient technology.
• Encourage mode shift when appropriate (about 25
  of all car trips are less than 5km).
• Make better use of logistics (for example car
  pooling).
• Rethink their car ownership when it is next time
  to do so.
• Offer better public transport (since the unfair
  advantage for cars would have been removed).

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The real cost of motoring

• A 90p litre of petrol in April 2006 broke down
  into

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European motoring taxes comparison total
taxation

• British drivers are taxed at the European average
• Dutch are taxed on average 50 more than UK
  drivers

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European motoring taxes comparison taxation on
use

• Focus taxation on use rather than ownership in
  the UK.
• Lower taxation paid for ownership are offset by
  petrol taxes.

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Costs of motoring

• The overall cost of motoring has fallen in real
  terms by 11 between 1975 and 2004
• Rail fares and bus fares have risen by 70 and
  66 respectively

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Aviation

• External costs of aviation have been put at 11bn
  a year in the EU
• Aviation has a privileged position in the
  economy
• No VAT or duty on aviation fuel no VAT on
  tickets and no VAT on new aircraft
• Less than 50 of the population fly
• Catering for projected growth will negate carbon
  savings from all other sectors combined and make
  reaching climate targets impossible.

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Fiscal Options

• Business as usual (V.E.D. and fuel duties)
• V.E.D reform
• National road user charging Fiscally neutral or
  revenue raising
• Distance based charges fiscally neutral or
  revenue raising and weighted by CO2 and fuel type
• Company car distance charging

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Business as usual

• If the pump price of fuel increases 10
• Traffic will fall by around 3
• Fuel use will fall by around 7
• To hold traffic constant against 2.5 underlying
  growth
• Fuel must increase by 8 above inflation
• To hold emissions constant
• Fuel must increase by 3.5 above inflation
• What would be done with all the revenue?

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V.E.D. reform

• Budget 2006 7 bands from 0 - 210
• Differentials between 20 and 60
• Will this have an effect on behaviour?
• Others believe 300 between bands is necessary,
  with top band of 1800/yr for vehicles emitting
  180g/km or more
• Improve the market demand for highly fuel
  efficient vehicles

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Road user charging

• Fiscally neutral charge will have adverse
  environmental impacts
• A 16bn revenue raising reform would be needed to
  effect significant behaviour change
• Need clarity of goals congestion or emissions?

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Distance charge

• replacement of VED and Fuel Duty with a distance
  charging system
• Weighted by CO2 and fuel type for car model bands
• Fiscally neutral or to raise additional revenue
• More effective in stimulating behaviour change?

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Carbon rationing

• Personal carbon allowances (PCAs) or Domestic
  Tradeable Quotas (DTQs)
• National market in carbon units within a nations
  carbon budget
• Between people not countries
• Electronic system of rationing using existing
  debit card technology
• Equitable, transparent, guaranteed carbon savings
  .

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Public Attitudes

• Around ½ the population acknowledge car use in
  general as a cause of climate change (even less
  for flying)
• Air quality bigger concern than climate change
• First step need to make people aware of how
  much pollution they cause and what this means
• Make these costs transparent e.g. carbon
  displayed on petrol pumps and airline tickets
• There are signs of an increasing acceptance of
  interventions to limit individuals emissions.

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Questions

• Instead of modifying existing tax measures, could
  a different car taxation structure be more
  amenable to policies providing behavioural change
  signals, maintain government income, and be
  politically acceptable?
• What can Scotland do?
• How develop public support?
• Is it possible to design policy measures to
  stimulate the adoption of clean car technologies
  as well as promote travel behavioural change?