The Car and Fiscal Policy: a European Comparison



The Car and Fiscal Policy: a European Comparison

Authors

BUCKMANN E, PIERS R, RIENSTRA S, NEI Transport and HEMMEN L, Ministry of Transport, The Netherlands

Description

Transport pricing is an issue, in which economic theory and political/social acceptance seem to clash. Economic theory clearly demonstrates that pricing according to marginal social costs will guarantee that the transport system will achieve a socio- econ

Abstract

Transport pricing is an issue, in which economic theory and political/social acceptance seem to clash. Economic theory clearly demonstrates that pricing according to marginal social costs will guarantee that the transport system will achieve a socio- economic optimum. In such a system the mobility level and modal split will be in an optimal situation, arid hence the level of emissions, accidents eteetera. Here, we will not elaborate on the theoretical issues since a great body of literature is written on this subject - see e.g., ECMT (1998) and Verhoef (1996).

Despite this, the political and social acceptability of pricing is low. There seem to be strong actors opposing the introduction of effective pricing systems. Individuals - voters - are generally reluctant to change behaviour or accept pricing for assets which were free beforehand (Pdenstra, 1998). An additional problem is that the short run elasticities are much lower than long run elasticities, therefore prices need to be high in the beginning to achieve desired impacts. Otherwise short run results are minor, making pricing measures unattractive for e.g. politicians because they need to be re- elected in the short run.

Nevertheless, the European Union is promoting a European wide pricing system, based upon marginal cost pricing (EU, 1998). The EU argues that the system may largely solve current problems in transport, or at least bring them at a socio-economie optimum. In addition, the system may result in a level playing field in the competition between the various transport modes and may avoid fiscal competition between various countries.

Whatever the outcome of the discussions may be, it is likely that some way of hannonisation of transport pricing will occur within the European Union. The resulting system will be partly based upon existing experience and taxes in the various member states, also because it is not possible to determine a system which is fully based upon marginal social costs (ECMT, 1998).

This makes it very useful to gain insight in the fiscal measures introduced in transport. This paper provides an overview of the measures in 12 European countries: Austria, Belgium, Denmark, Germany, France, Italy, Luxembourg, the Netherlands, Norway, Sweden, Switzerland and the United Kingdom. Also attention will be paid to effects of measures and backgrounds for the pricing policies. The paper is based upon two studies conducted for the Research Centre of the Netherlands Ministry of Transport (NEI, 1998a and NEI, 1998b).

The way of investigating these measures is by literature study, telephonic interviews, a small questionnaire survey which has been sent to two experts per country and finally an essay which has been written by an expert out of one of the countries. The essays are presented in NEI (1998c).

Publisher

Association for European Transport