Urban Road Transportation Externalities: Costs and Choice of Policy Instruments
In terms of economics, the 'externalities' (or unrecognised costs) of urban transportation are a significant challenge for development. The authors of this research illustrate the magnitude of these various external costs, and review policy responses.
They find that regulatory policy instruments aimed at reducing local air pollution have been introduced in most countries in the world. On the other hand, fiscal policy instruments aimed at reducing congestion or greenhouse gas emissions are limited mainly to industrialized economies.
Although traditional economic instruments, such as fuel taxes and subsidies, are normally introduced for other purposes, the research finds they can also help to reduce 'externalities'. Land-use or urban planning, and infrastructure investment, could also contribute to reducing externalities; but they are expensive and play a small role in already developed megacities.
This research will assist local governments seeking to provide a strong economic argument for sustainable transport, as well as a basis to lobby state and federal governments.
