Basic economic principles of road pricing: From theory to applications

This paper presents, a non-technical introduction to the economic principles relevant for transport pricing design and analysis. We provide the basic rationale behind pricing of externalities, discuss why simple Pigouvian tax rules that equate charges to marginal external costs are not optimal in ‘second-best’ settings, and discuss the conceptual link between congestion pricing and road capacity. The final part of the paper is devoted to implementation paths for transport pricing policies. A simple numerical model demonstrates how different time patterns of constraints on pricing and capacity policy instruments may lead to different time patterns of efficiency along those implementation paths.     

Policy insights from the urban road pricing case studies

This article reviews and compares the results of four modelling case studies of urban road pricing implementation that were carried out for the MC-ICAM project. The studies all concern large cities in Western Europe (Paris, Brussels, Oslo and Helsinki) and they all examine phased implementation paths in which constraints on the set of policy instruments are progressively relaxed. However, the studies used different models that vary with respect to the endogenous dimensions of traveller behaviour, the level of detail in which road and public transit networks are represented, and assumptions about what policy instruments are available and what constraints apply.     

Research challenges in modelling urban road pricing: An overview

This article introduces the contributions of this special issue on modelling of urban road pricing and its implementation. The issue focuses on the design of urban road pricing schemes, and their spatial and temporal impacts, using quantitative transport (and land use) models. The policy implications of road pricing, including welfare and equity aspects, are studied for Paris, Brussels and Oslo using state of the art planning models. The issue is completed with a study of public acceptability and the upcoming road-pricing trial in Stockholm, and a review paper on the history of thought and future prospects of road pricing.     

Transport accounts—methodological concepts and empirical results

Although economic theory suggests social marginal cost pricing as the optimal pricing principle for transport infrastructure charging, information on the total (or average) social costs of transport and on the revenues from taxes and charges are important for pricing policy, for example for monitoring purposes and for the design of second-best prices. This paper provides empirical evidence on the total social costs and revenues for road, rail and air transport, covering all EU countries and Switzerland. It discusses methodologies to estimate the social costs of transport for all modes, focussing on practical experience with applying advanced methodological approaches both in the light of data quality and availability, and regarding the feasibility of conducting this type of research on a routine basis for transport policy.     

Urban transport pricing reform with two levels of government: A case study of Brussels

This paper analyses two challenges in the reform of urban transport pricing. First the construction of an optimal package of urban transport pricing instruments assuming one benevolent welfare maximizer. It is found that parking and tolling are the most important elements of the optimal package and that these policy instruments are sub-additive in their benefits. The second problem is the use of pricing instruments by different government levels: the urban government controls parking fees and the regional government controls a cordon toll. It is found that the overall efficiency losses in the Nash and Stackelberg equilibria are limited.     

Developing land use and transport PSS: Meaningful information through a dialogue between modelers and planners

One of the key barriers to integration of land use and transport planning is the lack of a “common language” (i.e. tools, instruments, indicators) that can support planners from both domains in developing shared visions and integrated strategies. Many of such tools and indicators have been developed in recent years, but not so many are implemented in practice. In this paper a new, participatory development approach for planning support systems (PSS) is proposed, termed “mediated planning support” (MPS) that addresses bottlenecks blocking this implementation. It is founded on insights from knowledge management, system dynamics and software innovation and is applied in the Greater Region of Amsterdam. This paper discusses the evolution of the PSS, highlighting the most useful elements which can be applied in other land use and transport planning projects. It offers insights for practitioners and researchers interested in land use and transport planning integration and for professionals that are dealing with supporting planning with information and technologies.     

Estimating welfare changes from efficient pricing in public bus transit in India

Three different and feasible pricing strategies for public bus transport in India are developed in a partial equilibrium framework with the objective of improving economic efficiency and ensuring revenue adequacy, namely average cost pricing, marginal cost pricing, and two-part tariffs. These are assessed not only in terms of gains in economic efficiency, but also in changes in travel demand and consumer surplus. The estimated partial equilibrium price is higher in all three pricing regimes when compared to the current price. As a result, consumer surplus falls in all three cases. The price increase is much larger with average cost pricing compared to marginal cost pricing or two-part tariffs, and hence a larger fall in demand and consumer surplus occurs due to average cost pricing. While there is a gain in economic efficiency from marginal cost pricing and two-part tariffs, this improvement comes at the expense of reduced public bus transit demand and consumer surplus, given the price inelastic public bus transit demand estimated for India. Given the mobility needs and the developmental concerns of a growing economy such as India, the challenge for policy makers is to balance the gains in economic efficiency in the public bus transit sector against other social, political, and developmental goals.     

Making urban road pricing acceptable and effective: searching for quality and equity in urban mobility

Urban Road Pricing has been proposed many times as a powerful instrument to fight congestion in urban traffic, but has systematically faced a hostile political envirionment, due to lack of confidence on its promised (traffic) results and fear of its political consequences. Lack of action in this front is contributing to stable or even growing congestion problems in most large cities.This paper tries to address the problem with a fresh look at the objectives of road pricing and at the reasons for that political hostility. For managing and developing the urban mobility system, efficiency and equity are normally taken as the basic economic objectives. Sustainability objectives may be integrated in the efficiency objective if we are able to represent adequately the costs of the resources consumed in the process. Political hostility is normally based on having to pay for what was freely available, and on the risk of exclusion for those with little revenue available for the extra cost of driving into the city.Pursuit of efficency leads to suggestion of marginal social cost pricing but this is hard to explain to the public and application of this principle is fraught with pitfalls since some components of that cost get smaller as traffic grows (noise related costs for example). Pricing is still a good option but the objective has to be something easier to understand and to serve as a target for mobility managers. That “new” objective is quality of the mobility system, with a meaning similar to that of “level of service” in traffic engineering, and prices should be managed to across space, time and transport modes in such a way that provision of service is made with good quality in all components.Pursuit of equity leads to some form of rationing, which has often been associated with high transaction costs and abuse by the administrators. But the use of electronic road pricing should allow easy ways to address the rationing process without such high costs. The basic proposition is that all local taxpayers receive as a direct restitution of their tax contribution a certain amount of “mobility rights”, which can be used both for private car driving in the tolled areas and for riding public transport.These principles are easily applicable with a variety of technical solutions for road pricing, from the simplest cordon pricing to the more sophisticated “pay-as-you-go” schemes. The paper addresses this question of implementation and argues for increasingly sophisticated schemes, as people get accustomed to the principles and finer targeting of demand segments may be needed.     

Transport policy and environmental impacts: The importance of multi-instrumentality in policy integration

Despite the introduction of many instruments in the transport system, they failed to reach their target since gains in global environmental efficiency have not been enough to cope with the consequences of transport growth. The ultimate environmental challenge for transport policy makers is to improve the effectiveness of implementation of policy instruments. This paper explores the concept of multi-instrumentality as a systematic approach for transport policy integration and implementation. Based on extensive literature review, we assess a set of 14 transport policy instruments (weaknesses, strengths and barriers to implementation) and perform a pair-wise analysis of potential synergies in their integrated implementation. Conclusions are drawn on the potential success of multi-instrumentality.     

How large is the gap between present and efficient transport prices in Europe?

In this paper, we analyse the gap between present transport prices and efficient transport prices. Efficient transport prices are those prices that maximise economic welfare, including external costs (congestion, air pollution, accidents). The methodology is applied to six urban and interregional case studies using one common optimal pricing model. The case studies cover passenger as well as freight transport and cover all modes. We find that prices need to be raised most for peak urban passenger car transport and to a lesser extent for interregional road transport. Optimal pricing results for public transport are more mixed. We show that current external costs on congested roads are a bad guide for optimal taxes and tolls: the optimal toll that takes into account the reaction of demand is often less than one third of the present marginal external cost.     

Planning for low carbon mobility: Impacts of transport interventions and location on carbon-based accessibility

Accessibility has been conceptualized and applied in different ways, depending on the underlying political objectives. In the context of climate change and ambitious emission reduction targets, environmental concerns have risen high on the political agenda. Existing methods for assessing transport-related environmental impacts typically depend on realized or modeled travel behavior. Many of them do not entail a spatial dimension, ignore the importance of the land use component, lack scenario building capabilities or have limited communication value. Consequently, accessibility analysis and planning could make a valuable contribution towards a low carbon transition, but needs to attune to the specific objective of reducing transport-related greenhouse gas emissions. This paper introduces a novel conceptualization of location-based accessibility, where CO₂ emissions are used as a travel cost in place of time or monetary costs. By identifying and assessing options for interventions in the land use and transport system, carbon-based accessibility instruments might serve a number of potential decision-making purposes related to low carbon mobility planning. Carbon-based accessibility of a business park in the Munich region is analyzed in multiple scenarios to demonstrate the application potential of the method. The experiential application focuses on the effects of changes in vehicle efficiency and occupancy rates of both car and transit, but also compares the resulting carbon-based accessibility levels to alternative sites with the transport system unchanged. Applying carbon-based accessibility instruments to real-world planning issues could enhance strategic decision-making processes in the context of climate change mitigation.     

沿江高速铁路建设实施方案研究

随着长江沿线城市化进程的加快和经济社会的发展,既有沪汉蓉铁路已经逐步不适应国家战略要求和沿线城市群间快速通达需求。高速铁路具有运量大、成本低、能耗小、占地少等优势,是绿色、大众化的交通工具。结合国家中长期高速铁路网规划,通过阐述沿江铁路通道发展现状及存在问题,结合通道内各区段预测客流量提出规划方案;最终形成沿江高速铁路"三步走"建设实施方案,有利于完善长江立体综合交通走廊建设,缩短时空距离,优化综合运输结构体系。     

History of thought and prospects for road pricing

Policy implications of the research program presented in this issue of Transport Policy are discussed according to their theoretical, historical and political origins. Problems related to government taxation are analysed in the light of the early literature on transport externalities pricing that began with Pigou [Pigou, A.C., 1920. The Economics of Welfare. MacMillan, London. (References are usually made to the 1932, 4th ed.)]. We then discuss decision-making processes in transport pricing implementation involving redistribution issues, acceptability, user's satisfaction and equity. The article also briefly reviews the general agenda of EU transport policy     

Is there a good governance model for the delivery of contemporary transport policy and practice? An examination of Melbourne and Perth

Land use and transport integration (LUTI) is a contemporary planning policy and practice that supports sustainable transport. Attempts to implement LUTI have raised questions about the appropriate organisational structure and the role of governance to deliver this policy. This paper presents the discussions from two public fora held in 2008 in Melbourne and Perth, Australia. Their purpose was to examine the governance arrangements for land use and transport integration. It is concluded that integration of land use and transport agencies does not mean that land use transport integration will be achieved in practice. Rather than simple organisational re-structuring, a focus on networked governance, together with strong regulation, is conducive to inclusive policy development and the implementation of land use and transport integration policies.     

TOD+PPP模式的开发运用和投资评价研究

TOD将交通系统的便捷高效和土地的集约利用深度融合,是构建城市发展新格局的关键。在TOD+PPP模式下,政府和社会资本通过合作伙伴关系,共同对轨道交通沿线的土地进行综合开发,利用土地增值收益反哺轨道交通的建设和运营,提高轨道交通的社会效益和经济效益。文中选取长三角地区的某条城际铁路,通过案例分析的形式介绍TOD+PPP的运作模式、开发方案和经济效益。     

Lessons from travel planning and road user charging for policy-making: through imperfection to implementation

In 1978 Gunn published a seminal paper which explained why implementation of policy is so difficult. The paper set out 10 conditions, which should be satisfied if perfect implementation is to be achieved. Whilst it is clear that perfect implementation is not possible in the real world, and Gunn has subsequently been criticised for his ‘top-down’ approach to decision-making, these conditions do, nonetheless act as an effective framework through which to evaluate good practice in the implementation of urban transport policy instruments. Two urban transport policy instruments, which form an increasingly important element of the Government's strategy in the UK for reducing the demand for private transport as set out in a New Deal for Transport (DETR, 1998), are travel plans and road user charging. Travel plans are a relatively recent policy instrument in the UK and seek to reduce trips to work by car by providing, through individual employers, a targeted, integrated package of incentives and disincentives to influence commuters' choice of mode of travel to and from the workplace. Road user charging, whereby motorists are charged for the road space they use in urban areas, seeks to reduce the congestion problem via the price mechanism, and has a longer history in the UK. To date the implementation of travel plans in the UK has been more widespread than that of road user charging. It is fair to say, however, that the widespread implementation of both urban transport policy instruments is a complex and sensitive area for decision-makers.The aim of this paper is firstly, to analyse travel plans and road user charging in the UK with respect to the conditions for perfect implementation put forward by Gunn and secondly, to highlight the elements of good practice, pertinent to the implementation of road user charging, in the process of the implementation of travel plans. Overall, the paper uses Gunn's theoretical framework as a basis for recommendations for better decision-making that will aid the wider implementation of both travel plans and road user charging internationally.     

On structural inelasticity of modal substitution in freight transport

At the European level there is an increasing focus on how freight transport can be moved from trucks on roads to more environmentally friendly modes such as rail and ship. A large proportion of the transport services between OD pairs, however, cannot be substituted since there is only one alternative available. The paper investigates the magnitude of this “structural inelasticity” of modal substitution in freight transport due to a sparser layout of rail and ship-based freight networks compared to road. In the analysis we use a recent Scandinavian freight demand model covering more than 800 zones. We find that the structural inelasticity is very significant - in particular for transportation over less than 500 km. Moreover, the inelasticity varies greatly with commodity groups and between OD pairs, and it depends strongly on the port and rail infrastructure. The results suggest that pure charging instruments (road pricing for trucks) in many regions will have limited mode substitution impacts. However, if combined with structural changes in terms of improved infrastructure for rail and ship, impacts may be greater.     

The implications of environmental costs on air passenger demand for different airline business models

Various environmental measures, including both regulations and fiscal instruments, have been used at airports globally to reduce the impacts of aircraft noise as well as aircraft engine emissions. Internationally, it is recognized that the costs of environmental and social externalities of air transport must be internalized and paid for by the aviation industry and its users. The use of noise related charges or taxes, which theoretically should be based on their respective social costs, has been proved to be effective at some European airports. This research aims to investigate the impacts of environmental costs, through environmental charges, on air passenger demand for different airline business models. The paper presents the mathematical models measuring the social costs of aircraft noise and engine emissions as a basis for setting up environmental charges. Six intra-European short-haul routes in two city pairs, namely London–Amsterdam and London–Paris, are selected for the empirical analysis. The environmental charges are then hypothetically applied to airlines with two different business models, full service carriers (British Airways and Air France-KLM) and low cost airlines (EasyJet). The results show that the potential percentages of demand reduction for both leisure and business passengers would be higher for Easyjet's markets, although with less environmental cost per passenger.     

Land use and public transport integration in small cities and towns: Assessment methodology and application

It is widely accepted that land use and public transport planning should be harmonised in order to provide a viable alternative to car transport. Following the Transit-Oriented Development (TOD) concept, many studies and plans aim to concentrate urban development in areas accessible by high-quality public transport. Encouraged by studies asserting the positive relation between urban density and public transport use, scholars and practitioners focused their attention on tools and strategies that increase urban density, thereby overlooking geographical contexts where these strategies cannot be applied. TOD might however be also a valuable strategy in low-density contexts, like lower density parts of metropolitan areas, or suburban areas and small towns. It seems therefore relevant and interesting to develop a methodology to explore the value of TOD strategies in such contexts. Our paper fills this analytical and application gap and proposes to extend the conceptualization and implementation of land use and public transport integration to areas where low-density urban development has already occurred (e.g., low-density suburbs, or areas where the protection of natural and cultural heritage precedes urban development). In such cases, where is not possible to increase urban density around transport nodes, the quality of the transport network plays a decisive role.The approach builds on the Node-Place Model by including evaluations of the quality of feeder networks. We applied the methodology to a case study in the Campania Region in southern Italy, indicating a possible way to evaluate land use and public transport integration while considering, at the same time, the quality of transport as network.The application of the methodology allowed to highlight imbalances between accessibility – by main and feeder transport – and land use intensity, and to sketch urban development strategies and priorities of intervention on the transport network.     

铁路运输在物流成本中的经济性分析

肯定物流在社会经济生活中的重要性,指出运输环节在降低物流成本、减少社会资源耗费中的突出地位,列举铁路运输方式的经济比较优势,分析铁路运输成本在经济学意义上的价值构成和含义,以及运输成本的计算、构成和与产品的联系等特点,得出降低铁路运输成本的主要途径是强化科学管理、优化运输组织的结论,并据此提出均衡运输、合理运输、直达运输、集中化运输、重载和高速运输等经济性方法。