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Transports and externalities
Transports and externalities
Transports and externalities
Transports and externalities
Transports and externalities
Transports and externalities
Transports and externalities
Transports and externalities
Transports and externalities
Transports and externalities
Transports and externalities
Transports and externalities
Transports and externalities
Transports and externalities
Transports and externalities
Transports and externalities
Transports and externalities
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Transports and externalities

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  • 1. TRANSPORTS NEGATIVE EXTERNALITIES VS. POSITIVE EXTERNALITY
  • 2. NEGATIVE EXTERNALITY VS. POSITIVE EXTERNALITY
    • Externalities or ‘spillovers’ are difficult to define in a non-technical way. But the concept is a familiar one.
    • In essence, a negative externality occurs
    • when one individual engages in na activity that imposes costs on another, and the victim cannot normally be
    • compensated for them through the
    • market mechanism. The classic example
    • of such a ‘bad’ is a smoky factory that
    • harms a laundry next door to it Positive
    • externalities , on the other handp,r ovide
    • benefits to those affected by them.
  • 3. GOODS AND BADS IN TRANSPORT
    • Transport services themselves are a ‘good’.
    • They are an essential input into the production process and personal consumption. [...] By
    • convention, however, national-income
    • accounts do not include non-traded
    • items .
  • 4. GOODS AND BADS IN TRANSPORT
    • The cost to the community of
    • externalities associated with productive
    • activities such as transport is therefore
    • not deducted from GDP figures.
  • 5. BADS IN TRANSPORT
    • Exhaust emissions, the additional delay
    • imposed on other road usebrsy an extra
    • vehicle entering a busy street, noise, and
    • accidents are commonly cited examples
    • of ‘bads’ generated by the transport
    • sector. But traffic congestion or noise
    • can also occur on railway lines, cycle
    • paths, or at airports.
  • 6. COMMAND AND CONTROL APPROACH
    • A regulatory, ‘command and control’ approach is one means of reducing externalities.
    • R e g u l a t i o n justified when ‘ e c o n o m i c ’
    • i n s t r u m e n t s feasible, as was the case until recently with e l e c t r o n i c charging for road use.
  • 7. COMMAND AND CONTROL APPROACH ORTODOXA VS. HETEODOXA
  • 8. ECONOMIC APPROACHS
    • PIGOU VS COASE
    • WELFARE ECONOMICS VS NEO-INSTITUTIONAL ECONOMICS
  • 9. PIGOVIAN TAXES
    • A ‘polluter’ can be required to ‘internalise’ a
    • pollution externalityb y paying a tax or charge
    • to reflect the additional costs to society from
    • the externality. Imposition of such ‘Pigovian’
    • taxes, named in recognition of their first
    • proponent, A.C. Pigou (1920), results in a
    • socially optimal level of pollution. Apart from
    • any administrative costs involved, a major
    • drawback of Pigovian taxes is the difficulty ofestimating the value, and hence the cost, of an -
    • externality at the socially optimal level.
  • 10. PIRGOVIAN TAXES
    • This problem is currently almost intractablein the
    • case of ‘carbon’ taxes to reduce greenhouse emissions because there is no scientific consensus on the effect on the likely damage in local areas.
  • 11. PIGOVIAN TAXES
    • Pigovian or ‘green’ taxes have attracted
    • considerable attention in Europe in recent
    • years because they offer a ‘double-dividend’.
    • Not only do they correct market failure by
    • reducing externalities to optimalel vels, but the
    • revenue raised offers governments scope to
    • reduce income, payroll and other taxes. All
    • taxes reduce the community’sw elfare (the socalled
    • ‘ deadweight loss’) because they
    • discourage the economic activity being taxed.
  • 12. PIGOVIAN TAXES
    • Where action is taken, it is important that all
    • externalities, in all modes of transport
    • (including public transport), are addressed.
    • Otherwise, patterns of production and
    • consumption will continue to be distorted, and
    • there can be no guarantee that social welfare
    • will be increased.
  • 13. COSEAN RIGHTS
  • 14.  
  • 15.  
  • 16. The Social Costs of Transport: Evaluation and Links with Internalisation Policies by Emile Quinet Professor and Head, Economics and Social Sciences Department, Ecole nationale des ponts et chaussées, Paris, Franc
  • 17.
    • With the increasing concern for the environment, the rising demand for transport and the development of economic understanding in these fields, a great deal of research is now being done on evaluating the social costs of transport, a situation which justifies a general revie

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