A Modelling Approach
Transport Economics, Management and Policy series
Edited by Bruno De Borger and Stef Proost
Bruno De Borger, John Peirson and Roger Vickerman 3.1 INTRODUCTION The previous chapter resulted in two speciﬁc lessons for transport policy design. First, it suggested that there does not exist a single policy instrument that internalises all externalities simultaneously. Individual price and non-price instruments may be quite successful in internalising individual externalities (for example, insurance premiums to tackle accident risks, fuel taxes to correct for CO2 emissions, direct emission regulation to reduce other air pollution), but a coherent transport policy necessitates a welldesigned policy package, consisting of an appropriate combination of instruments. Second, the discussion made it clear that from an eﬃciency viewpoint an increasing reliance on pricing instruments is necessary. Moreover, internalising the congestion externality is diﬃcult with the existing price instruments, so that new pricing tools will have to be introduced that allow diﬀerentiation of charges in time and space in function of local and temporal variations in congestion. One of the main objectives of this book is to study the implications of various policy packages for transport demand and for overall welfare in a number of diﬀerent European cities and countries, using a numerical optimisation model speciﬁcally designed for this purpose. In this chapter we present the policy packages that were selected for the empirical analysis reported on later in the book. The criteria for the selection of the policy packages were the following. First, they had to be consistent with a stronger emphasis on pricing instruments, as suggested by economic...
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