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SECRETARÍA DE ESTADO DE INFRAESTRUCTURAS Y
PLANIFICACIÓN
MINISTERIO DE FOMENTO
DIRECCIÓN GENERAL DE PLANIFICACIÓN Y COORDINACIÓN
TERRITORIAL
CENTRO DE ESTUDIOS Y EXPERIMENTACIÓN DE OBRAS
PÚBLICAS

Encuentro Tarificación
Infrastructure chargingXavier DELACHE
Madrid, 25 de octubre de 2004
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Infrastructure charging

• Overview of european practices
• Some issues in France

CEDEX Seminar Madrid, 25 de octubre 2004 Xavier
DELACHE Views expressed dont reflect the
Ministrys position
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Overview of european practices

• Available instruments for cost-internalisation
  can be summarized as fuel taxes vehicle taxes
  charges
• Historically, main charging instruments used by
  governments are fuel and vehicle taxes
• Fuel and vehicle taxes have been recently
  eco-redesigned
• But re-designing these instruments prove to be
  difficult
• Fuel taxes are a key EU competition debate (road
  and aviation) and become sensitive in the oil
  price context
• Vehicle tax policies are long term policies
  (stock) and prove to be also competition-sensitive
  (cf. french project in 2004)
• Environmental fuel / vehicle tax policies need to
  be fine-tuned
• And taxes are not always relevant to the cost
  structure
• Geographical differenciation
• Time differenciation
• Vehicle and generation differenciation

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Overview of european practices

• Relevance of pricing instrument to cost structure

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Overview of european practices

• Congestion is a central issue and an increasing
  precursor of pollution

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Overview of european practices

• Recent european initiatives have focused on
  charging instruments, e.g.
• Urban ( cars)
• London 5 per vehicle entering the 21 km2 toll
  zone (impact after 1 year traffic -20 time
  lost in congestion -30 average speed 20)
• Randstadt (NL - project surrendered in 2001)
  2,5 per vehicle
• Rome inner city vignette
• ( N.B Parking charging is always somewhere
  under revision in EU)
• Road ( trucks)
• Germany (law of 2003) average charge of 12,4 c
  / km for vehicles gt 12 t (cf. implementation
  issues)
• Austria (law of 1996 implementation 2004)
  charge of 13 to 27 c / km for vehicles gt 3,5 t
  
• NL (project surrendered in 2002)
• Air(ports)
• Swizerland landing charges based on air
  emissions (40 when pollution index is 100
  higher)
• Various countries landing charges
  differenciated on noise level

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Overview of european practices
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Overview of european practices
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Overview of european practices

• Nethertheless, recent european initiatives /
  experiences have faced implementation issues
• Monitoring technologies / costs
• Low social acceptability
• Poor awareness / misunderstanings on
  environmental impacts
• Incoherence / competition / conflict between
  local and national levels
• ? Some guidelines
• Shared assessment of cost and pricing principles
  (cf. France)
• Cross-incentives between geographical policy
  levels
• Acceptability of pricing schemes
• Focus on transport policy not only on environment
• Raise awareness and promote the project by
  alternatives scoping
• Assess distributive issues, activities
  re-localisation and citizens expectations
  (declared preferences revealed through traffic
  models)
• Implement step by step under-price at the
  beginning

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Some issues in France

• From an assessment point of vue, main pricing
  issues cover
• Road traffic
• Vehicle taxes
• Urban traffic
• Air traffic
• There is a common basis and language for project
  appraisal and pricing policies ? consistency
  among instruments
•  Boiteux  report 2001 common value for
  external costs
• Well documented price-elasticities (fuel and
  charges)
• Less available assessment on
• landscape / fragmentation costs
• urban issues
• aviation external costs
• elasticities of vehicles taxes subsidies

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A common assessment basis 2001

• Interministerial report based on litterature
  review and independant expertise
• Covers
• Value of life
• Value of time
• External costs air noise climate
• Transcripted in appraisal rules in march 2004
• Used to assess road pricing policy in 2003
• Used to assess vehicle taxes polices in 2004

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A common assessment basis 2001

• Life values
• Death avoided 1500 K
• Heavy injured avoided 225 K
• Injured avoided 33 K
• Road abatment (self insurance) -33
• Increase over time value of consumption per
  capita
• Green house gases value 100 / tonC
• Increase over time 3 annual

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A common assessment basis 2001

• Noise values lost of asset value
• Increase over time value of consumption per
  capita

Level of noise (dB) 55-60 60-65 65-70 70-75 gt 75
Loss of value 0,4 0,8 0,9 1,0 1,1
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A common assessment basis 2001

• Air Pollution
• Increase over time value of consumption per
  capita

( / 100 Veh-km) Urban Semi-urban Countryside Average
Cars, vans 2,9 1,0 0,1 0,9
Trucks 28,2 9,9 0,6 6,2
Buses 24,9 8,7 0,6 5,4
( / 100 train-km)
Rail freight 458 160 11 100
Rail passengers 164 57 4 36
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A common assessment basis 2001

• Comparaisons with INFRAS and Marco-Polo

( / 100 Veh-km) Boiteux (average) INFRAS 2004 Marco-Polo
Cars, vans 0,9 1,8
Trucks 6,2 26 6,9
Buses 5,4 24,7
( / 100 train-km)
Rail freight 100 444 276
Rail passengers 36 33,7
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A common assessment basis 2001

• Comparaisons with INFRAS and Marco-Polo

Differenciations Boiteux INFRAS 2000
Zones field versus urban (cars) 1 to 30 1 to 6
Zones field versus urban (trucks) 1 to 30 1 to 10
Pollution Euro 4 versus Euro lt 1 (cars) NA 1 to 3
Pollution Euro 4 versus Euro lt 1 (trucks) NA NA
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Some issues in France (ctd)

• Road traffic
• To what extent is (truck) traffic under-priced ?
• To what extent is geographical and peak-off peak
  differenciation needed ?
• Vehicles taxes
• Can incorporation of technical progress in fleets
  be fastened at a reasonable costs while avoiding
  opportunistic behaviours ?
• Urban
• Can scarce-space policies avoid or only postpone
  congestion charges ?
• Air traffic
• Can airport charges be a substitute to
  international fuel taxes or en-route charges ?

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Road traffic prices and costs

• Study on prices and marginal costs (2003) on the
  road network
• for different vehicles
• on various types of infrastructures (motorways
  trunck roads local roads)
• in various locations (urban field mountain)
• in peak or off-peak periods
• Marginal costs infrastructure maintainance
  congestion accidents noise air climate
• External costs based on 2001 report
• Prices fuel excice duties taxes on vehicles
  taxes on insurance tolls

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Road traffic prices and costs

• Agregate results

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Road traffic prices and costs
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Road traffic prices and costs
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Road traffic

• Traffic on non-toll network is underpriced
• ? opportunity for a charging scheme ?
• But monitoring costs are significant
• ? need to balance two contradictory objectives
•  revenue raising approach  (limit to
   monopolistic  sections of the network)
•  welfare maximisation approach  (benefit from
  cross elasticities)
• N.B Peak - off peak pricing has proved to have
  significant impacts on car behaviours with
  communication
• (A1 North motorway A10 Atlantic motorway
  A5-A6 South-east motorway).

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Vehicles

• Context significant technical progress on new
  vehicles and turn over of vehicle fleets slowdown
• ? opportunity for incentives to accelerate
  innovation diffusion ?
• Assessment of various tax-subsidy schemes to new
  less polluting vehicles
• Particle filters on cars, buses or trucks
• Electric cars
• CO2 bonus-malus on new cars
• Replacement of old cars, vans, trucks to new
  (Euro IV)

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Vehicles

• Assessment based on 2001 external costs
• Net present value of external costs avoided
  / Net present value of
  accelerated replacement of vehicles

Technology External cost avoided / extra cost
Particulate filters buses 400
Electric cars 0,2
LPG cars 0,6
Particulate filters cars, trucks forthcoming
Replacement of old cars, vans, trucks forthcoming
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Urban

• Main pricing instruments (fuel vehicle taxes)
  are not available at the local level
• Parking pricing is a classical instrument, but
  distorted by private parking development, which
  is hardly regulated
• Welfare benefits of congestion charges are well
  documented (cf. London)
• But local authorities are reluctant to congestion
  charges unless infrastructure-based
• ? Is there a correct incentive to local
  authorities ?
• Externalities are both
•  internal  (congestion, noise and local
  pollution)
•  external  (regional pollution and climate
  change)
• ? No incentive to reduce CO2 and regional
  pollution

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Urban

• Relevance of issues
• Relevance of instruments ( to )
• Availability of instruments or ()
• ? would an incentive to local authorities on CO2
  help implement congestion charges (e.g. tradable
  permits, subsidies) ?

Cost Instrument Congestion Noise Local pollution CO2
Fuel taxes () () ()
Vehicle taxes / subsidies () () ()
Charges
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Air traffic

• Fuel taxes or en route charges are first best
  instruments to deal with climate and regional
  pollution
• Welfare surplus is well documented, namely thanks
  to technical progress on fleets (cf. EU study,
  2001)
• But International coordination is difficult (cf.
  ICAO)
• Noise, air pollution, and congestion also become
  problematic at the local level (airports)
• Available assessments show that incentives on
  noise and air pollution (landing charges) have an
  impact on fleets structures, even though not
  harmonized internationally
• ? Local pollution and CO2 win-win policies
• ? Trafic competition and aircrafts competition
  trade-offs

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Issues pricing and cost assessment

• Marginal versus average costs and revenue raising
  
• pricing optimality is based on marginal costs
• (with the condition that ? revenues gt stand
  alone costs)
• Revenue raising and earmarking not a pricing
  issue
• unless expenditures portfolio becomes the basis
  for tax policy
• if so, the risk is to focus on revenue raising
  low rate broad base
• Infrastructure (capacity) versus congestion
• If prices and investments are optimal, congestion
  capacity costs
• otherwise, congestion costs should be prefered
  unless prices are meant to regulate over
  investment
• Peak - off peak costs need to be differenciated
  based on congestion costs
• Landscape fragmentation costs fixed or
  traffic-sensitive ?
• Cf. debate on capacity costs

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Issues pricing and cost assessment

• Accidents specific value of life ?
• Age specificities
• Higher willingness to pay to avoid accident
  (violent)
• Self-internalisation (30 assumed on raod trafic
  in France)
• Behavioural trends / inflexions (cf. France)
• Revenue-influence
• Noise
• Abatment versus protection versus perception
  housing markets are not
  perfect, especially for poor people willigness
  to pay to reduce noice gt real expenditures
• Urban areas average traffic versus
  infrastructure-based
• Climate change
•  Kyoto  (national ceiling) or  early acions 
  approach value of CO2 tends to be higher in the
  short term
•  Adaptability  approach prices must increase
  with time
• But no specific discount rate

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Issues pricing and cost assessment

• Air pollution
• Unit value of years losts inflence of age
• (in France 0,6 when gt 60 years)
• Unit value of morbidity years quality-adjusted
  life
• Number of years losts epidemiological
  controversy
• Specificities of dense zones density is the
  main cost driver
• Specificities of confined areas density
  topography are costs drivers
• (in France estimated adjustment factor 15 in
  valleys)
• Norms and costs
• Emissions even below norms are still external
  costs

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Main references

• Report to the Commission, joint expert group on
  transport and environment, january 2004 (Angel
  Aparicio Xavier Delache)
• European environmental agency, price signals
  report, september 2004
• Choix des investissements et coût des nuisances,
  Commissariat général du Plan, 2001
• Instruction cadre pour lévaluation des projets
  dinfrastructures de transports, mars 2004
• Couverture des coûts et des infrastructures
  routières, septembre 2003 (Xavier Delache alii)
• Commission for Integrated Transport, congestion
  charge, 2002
• Thank you