Fiscal Policy Instruments for Reducing Congestion and Atmospheric Emissions in the Transport Sector : A Review
This paper reviews the literature on the fiscal policy instruments commonly used to reduce transport sector externalities. The findings show that congestion charges would reduce vehicle traffic by 9 to 12 percent and significantly improve environme...
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| Language: | English |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2008/06/9579011/fiscal-policy-instruments-reducing-congestion-atmospheric-emissions-transport-sector-review http://hdl.handle.net/10986/6872 |
| Summary: | This paper reviews the literature on the
fiscal policy instruments commonly used to reduce transport
sector externalities. The findings show that congestion
charges would reduce vehicle traffic by 9 to 12 percent and
significantly improve environmental quality. The vehicle tax
literature suggests that every 1 percent increase in vehicle
taxes would reduce vehicle miles by 0.22 to 0.45 percent and
CO2 emissions by 0.19 percent. The fuel tax is the most
common fiscal policy instrument; however its primary
objective is to raise government revenues rather than to
reduce emissions and traffic congestion. Although
subsidizing public transportation is a common practice,
reducing emissions has not been the primary objective of
such subsidies. Nevertheless, it is shown that transport
sector emissions would be higher in the absence of both
public transportation subsidies and fuel taxation. Subsidies
are also the main policy tool for the promotion of clean
fuels and vehicles. Although some studies are very critical
of biofuel subsidies, the literature is mostly supportive of
clean vehicle subsidies. |
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