Buses, Houses or Cash? : Socio-Economic, Spatial and Environmental Consequences of Reforming Public Transport Subsidies in Buenos Aires
Transit subsidies in the urban area of Buenos Aires are high, amounting to a total of US$5 billion for 2012. They have been challenged on several counts: suspected of driving urban sprawl and associated infrastructure costs, diverting resources fro...
| Main Authors: | , , , |
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| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2017
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/889761502738189524/Buses-houses-or-cash-socio-economic-spatial-and-environmental-consequences-of-reforming-public-transport-subsidies-in-Buenos-Aires http://hdl.handle.net/10986/27973 |
| Summary: | Transit subsidies in the urban area of
Buenos Aires are high, amounting to a total of US$5 billion
for 2012. They have been challenged on several counts:
suspected of driving urban sprawl and associated
infrastructure costs, diverting resources from system
maintenance, and failing to reach the poor among others. In
this context, this paper examines the impacts of cost
recovery fares under a range of different policy scenarios
that could cushion the impact of fare increases. The
alternative scenarios that are scrutinized are the
uncompensated removal of the transit subsidy, its
replacement by a lump sum transfer, and its replacement by
two different construction subsidy schemes. Using a dynamic
urban model (NEDUM-2D) calibrated for the urban area of
Buenos Aires, all scenarios are assessed along four
dimensions: (i) the efficiency/welfare impact on residents,
(ii) the impacts on the internal structure of the urban area
and sprawl, (iii) the impact on commuting-related carbon
dioxide emissions, and (iv) the redistributive impacts, with
a focus on the poorest households. A series of results
emerge. First, there are consumption-related welfare gains
for residents associated with replacing the transit subsidy
by a lump sum transfer. Second, there are only moderate
reductions in urbanization over time and thus infrastructure
costs associated with the subsidy removal. Third, the
replacement of the transit subsidy leads to only moderate
increases in carbon dioxide emissions despite lower public
transport mode shares, because households will chose to
settle closer to jobs, thereby reducing commuting distances.
Finally, the replacement of the transit subsidy by a lump
sum transfer will lead to short-term harsh redistributive
impacts for captive transit users in some areas of the urban
area. Medium-term adjustments of land and housing prices
will partially mitigate the negative impacts of higher
transport costs for tenants, but will further hurt homeowners. |
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