service économique et statistique daei/ses ministerio de fomento centro de estudios y...

Serviceéconomique et statistique

DAEI/SES

MINISTERIODE FOMENTO

CENTRO DE ESTUDIOSY EXPERIMENTACIÓNDE OBRAS PÚBLICAS

DIRECCIÓN GENERALDE PLANIFICACIÓN YCOORDINACIÓN TERRITORIAL

SECRETARÍA DE ESTADO DE INFRAESTRUCTURAS Y PLANIFICACIÓN

Encuentro: “Tarificación”

Madrid, 25 de octubre de 2004

Infrastructure chargingXavier DELACHE

Service économiqueet statistique

ministèrede l’Équipementdes Transportsde l’Aménagementdu Territoiredu Tourismeet de la Mer

directiondes Affaireséconomiqueset internationales

Infrastructure charging

CEDEX Seminar ; Madrid, 25 de octubre 2004Xavier DELACHE

Views expressed don’t reflect the Ministry’s position

Overview of european practices

Some issues in France


DAEI/SES

Overview of european practicesAvailable instruments for cost-internalisation can be summarized as fuel taxes ; vehicle taxes ; chargesHistorically, main charging instruments used by governments are fuel and vehicle taxes Fuel and vehicle taxes have been recently eco-redesignedBut 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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Relevance of pricing instrument to cost structure

Cost item 1st preference 2nd preference 3rd preference Marginal infrastructure costs

Differenced charge per kilometre

Excise duty Ownership tax

Safety Through insurance premiums


Excise duty

Greenhouse effect Fuel excise duty Differenced charge per kilometre

Atmospheric pollution


Fuel excise duty Ownership tax

Noise Differenced charge per kilometre

Fuel excise duty Ownership tax

Congestion Congestion charge Differenced charge per kilometre

Source : EEA, september 2004


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Congestion is a central issue and an increasing precursor of pollution


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Overview of european practicesRecent 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 > 12 t (cf.

implementation issues)– Austria (law of 1996 ; implementation 2004) : charge of 13 to 27 c € / km for

vehicles > 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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EEA, september 2004 Non-fuel-related taxes and charges

A B DK

F I N

F GER

GR

I RE

I LUX

NL

P E S UK

Air Rail transport X Aviation X Water transport X X X X X X Road - freight X X X X X X X X X Road - passenger X X X X X X CO2 Rail transport X X Aviation Water Road - freight Road - passenger X X X X Lower tax for low-sulphur X X X X X X X Carbon tax on fuel X X


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Non-fuel-related taxes and charges

A B DK

F I N

F GER

GR

I RE

I LUX

NL

P E S UK

Noise Rail transport Aviation X X X X X X X Water transport Road - freight X X Road passenger

Congestion Rail transport Aviation Water transport Road - freight X Road passenger X


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Overview of european practicesNethertheless, 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 FranceFrom 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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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 € / tonCIncrease over time : + 3% annual


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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 > 75

Loss of value 0,4% 0,8% 0,9% 1,0% 1,1%


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A common assessment basis 2001Air 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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• 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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• 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 < 1 (cars) NA 1 to 3

Pollution : Euro 4 versus Euro < 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 costsStudy 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 reportPrices = fuel excice duties + taxes on vehicles + taxes on insurance + tolls


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Road traffic : prices and costsAgregate results

Prices / marginal costs Trucks Cars Vans All

National network 0,98 1,39 1,33 1,23

Toll motorways 1,83 3,46 3,88 2,74 National roads 0,59 0,79 0,70 0,71

Other networks 0,39 0,84 1,05 0,79

Provincial roads 0,39 0,79 1,09 0,75 Vincinity roads 0,37 0,91 1,02 0,86

Total 0,75 1,02 1,16 0,97


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Road traffic : prices and costs

Infrastructure Marginal costs Price

Trucks (c : veh-km) Off-peak Peak Taxes Toll

Urban toll-free motorway 2* 4 42,2 65,2 16,3 0

Urban toll-free motorway 2 * 3 41,5 64,5 16,3 0

Sub-urban toll-free motorway 2*3 22,5 45,5 13,0 0

Sub-urban toll motorway 2*3 21,4 44,4 13,0 11,0

Sub-urban toll free motorway 2*2 17,3 40,3 13,0 0

Field toll motorway 2*2 8,0 8,0 13,0 12,0

Field toll-free motorway 2*2 8,0 8,0 13,0 0

Montainous toll motorway 35,4 35,4 19,5 20,0

Field national road 10,9 33,9 14,3 0


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Road traffic : prices and costs

Infrastructure Marginal costs Price

Cars (c : veh-km) Off-peak Peak Taxes Toll

Urban toll-free motorway 2* 4 5,8 15,8 5,6 0

Urban toll-free motorway 2 * 3 5,1 15,1 5,6 0

Sub-urban toll-free motorway 2*3 3,1 13,1 4,9 0

Sub-urban toll motorway 2*3 3,6 13,6 4,9 6,1

Sub-urban toll free motorway 2*2 2,6 12,6 4,9 0

Field toll motorway 2*2 2,4 2,4 4,9 6,2

Field toll-free motorway 2*2 1,7 1,7 4,9 0

Montainous toll motorway 5,5 5,5 5,4 9,6

Field national road 3,9 13,9 5,1 0


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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 costsNet 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 regulatedWelfare 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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UrbanRelevance of issuesRelevance 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 pollutionWelfare 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 > 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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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 > 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


DAEI/SES


Air pollution : – Unit value of years losts : inflence of age

• (in France 0,6 when > 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 2004Choix des investissements et coût des nuisances, Commissariat général du Plan, 2001Instruction cadre pour l’évaluation des projets d’infrastructures de transports, mars 2004Couverture des coûts et des infrastructures routières, septembre 2003 (Xavier Delache & alii)Commission for Integrated Transport, congestion charge, 2002

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