The Impact on Transport and the Economy of a Levy on Mobility



The Impact on Transport and the Economy of a Levy on Mobility

Authors

F W C J van de Vooren, T Pauwels, University of Antwerp, BE

Description

The paper examines how and in which extent a levy on mobility influences transport and the economy taking into account the way of spending the revenues of the levy. Preferences are formulated for certain ways of spending.

Abstract

In Europe, a levy on mobility is generally realized in the form of an excise on fuel. Recently however, a congestion charge is applied in Central London and lorries are charged for the use of German motorways. The German example of road pricing in the form of a levy per kilometre driven offers the possibilities of differentiation to place and time in order to charge for congestion and environment damage. Contrary to an excise on fuel, a levy per kilometre makes it no longer attractive for people in border regions to refuel in neighbouring countries where no levy or a lower levy exists.

The paper examines how and in which extent a levy on mobility influences transport and the economy. Therefore, the interaction between the economy and transport and the way of spending the revenues of the levy are taken into account. Transport can decrease by a levy on mobility at the one hand and it can increase by the economic effect of spending the revenues of the levy at the other hand.

Since a traffic model assumes the economy as exogenous, we cannot use it for estimating the impact on transport of a levy on mobility including the spending of the revenues of the levy. Moreover, we want to estimate its impact on the economy. Therefore, we use the MOBILEC model (MOBILity/EConomy), which specifies the relationships between the economy, mobility, infrastructure and other regional features. The paper describes this dynamic, interregional model containing transport of passengers and goods by mode. Substitution between transport modes is possible. Its main characteristic is the interaction between the economy and transport: the economy influences transport and transport influences the economy.

A specific way of spending the revenues of a levy on mobility can be put into the model. We consider the following options of spending:
(1) increase of government consumption;
(2) decrease of direct taxes;
(3) decrease of indirect taxes, including a fixed road tax;
(4) decrease of the government deficit;
(5) decrease of social security premiums in the gross wage rate;
(6) improvement of infrastructure.
These ways of spending are specified in more detail in the paper.

A theoretical analysis of these spending options shows their influence on the economic growth, but its distinguishing power between the options is limited in order to formulate preferences for certain options. Therefore, we make an empirical study of the levy on mobility and the spending options in the form of a scenario analysis for Belgium. The study shows its effects on the domestic product and employment of Belgium, calculated with the help of the (interregional) model. In addition, the effects on transport of passengers and goods by mode are presented. On the basis of the research results, preferences are formulated for certain ways of spending of the revenues of a levy on mobility.

Publisher

Association for European Transport