technische zusammenarbeit (gtz) gmbh international ... · technische zusammenarbeit (gtz) gmbh 38...

Economic and Fiscal Policy InstrumentsManfred Breithaupt

International Conference on Sustainable Transportation & Clean Air

Jakarta, 29 – 31 May 2000

Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ) GmbH

Economic instruments (EI) as a policy tool• Background, goals and principles of sustainable transport

• Role of EI in transport policy

Experiences with EI• in Asia (e.g. Singapore)

• in the EU (e.g. Trondheim, Norway)

Critical factors for EI implementation

Possible EI strategies for Surabaya

Structure of the presentation

1

2

34

2


• Pollutant levels from vehicle emissions unacceptably high in many places

• Global, regional and local environmental problems require sustainable transport policy

• Sustainable transport policy requires that users of private vehicles pay for the full costs of their travel; ie. costs are internalised

• Fiscal and economic instruments are widely recognized as the best mechanisms to encourage efficient und sustainable transport systems(e.g. EU Green Paper “Towards Fair and Efficient Pricing”, White Paper “Fair Payment

for Infrastructure Use”)

Increasing importance of economic instruments (EI) in transport policy

Background

3


13192

Figure 6.1 shows the densities of the Asian cities and the other regional averages and highlights

the large range of densities found in the Asian sample.

Table 6.1 shows the above terminology applied to the densities of all of the cities in the

international sample. Of the nine Asian cities in this study, three have upper-middle density,

four are high density and two are of very high density. Plate 6.1 provides a pictorial

perspective to give a better idea of the kinds of urban fabric that have such contrasting

densities.

Figure 6.1 Urban densities in Asian cities and for other regional groupings of cities

from an international sample of cities, 1990

12 1426

50 5971

87

149171 177

198

245

301

0

50

100

150

200

250

300

Per

sons

per

hec

tare

Aus

tral

ian

Am

eric

anC

anad

ian

Euro

pean

Kua

la L

umpu

rTo

kyo

Sin

gapo

reB

angk

ok

Jaka

rta

Sura

baya

Man

ila

Seo

ul

Hon

g K

ong

Population density:• High density as a challenge but also an opportunity for transportation and pollution.• High density means rapid increases in congestion with per capita increases in car ownership.• Recall earlier table: car ownership in Surabaya is rising sharply.

Source: Barter 1999

URBAN POPULATION DENSITY, 1990Urban population densities

Source: Barter, Paul, The Challenge of Rapid Motorisation in Dense Cities, Unpublished PhD thesis, 1999, p192

4


economic instruments.ppt; Folie 1

gtzDeutsche Gesellschaft fürTechnische Zusammenarbeit (GTZ) GmbH

External Costs of the European Transport Sector (in % of GDP)

economic instruments.ppt; Folie 5

gtzDeutsche Gesellschaft fürTechnische Zusammenarbeit (GTZ) GmbH

External Costs of the European Transport Sector (in % of GDP)External costs of the European

transport sector (% of GDP)

5


Absolute environmental costs of allmodes of transport in Europe (1991)

HIGHEST VALUE: Portugal

LOWEST VALUE: Norway

AVERAGE: Europe

10.3 % of GDP

3.0 % of GDP

4.6 % of GDP

6


Goals and principles

“User pays” principleInternalize all costs to the users, including investment and maintenance of infrastructure, external environmental costs (air pollution, safety noise, land use, greenhouse gases, etc.)

Target-related instrumentsSet environmental targets (political decision!), other flexible mechanisms

7


Economic goalsRevitalisation of inner urban areas; efficient labour market operation; poverty alleviation; efficiency; low-cost solutions; fix market failures

Social goalsSocial inclusion; emphasis on modes available to all; health and safety; reduced transport burden on the poor and less mobile

Environmental goalsBetter local, regional and global air quality; less energy use, pollution and noise; less land devoted to transport; intergenerational equity; pleasant city streets

Infrastructure operationReduced congestion; higher capacity; better accommodation of all transport modes; full cost recovery

Sustainable mobility

8


Economic incentives for:

... revenue creation and shift towards sustainable transport behaviour

Coherent framework neededMain imperatives• Remove distortions in transport pricing (remove hidden and overt

subsidies of private car users)!

• Use pricing systems to support sustainable transport modes!

• Integrate new local funding sources into strategic planning!

• Provide efficient, equitable and sustainable access!

9


Pro/contra of EI in transport

Pro• Efficient use of resources

• incentives for sustaina-ble transport behaviour

• fairness (user pays)

• economic, social & envi-ronmental sustainability

• revenue generation (e.g. for public transport improvements)

Contra• Limited environmental

effectiveness

• insecure source of income

• impact on competitiveness?

• doubtful public acceptibility

10


Charges/taxesEmissions (pollution, CO2, noise), fuel use, technology, fuel type, purchase, use (including road use), disposal

SubsidiesPublic transport, clean & efficient fuels/technologies

Tradeable emission permitsCO2, NOx, VOC emissions

EI in transport policy

11


EI in the OECD (1)

• Differentiated fuel taxes (promote cleaner fuels)

• vehicle taxes (purchase, use, waste)

• property taxes, development levies

• road pricing (differentiated according toemissions, time, day, area, etc.)

• parking charges, taxes for parking

• subsidies for clean cars or for conversion

• fiscal incentives to remove older cars

• promoting/subsidizing public transport

Implementation on ...Federal

levelLocal level

12


EI in the OECD (2)Transport sector related taxes and charges

Source: OECD (1997): Evaluating Economic Instru-ments for Environmental Policy, Paris, S. 20-22

13


“Earmarking” revenues

Sources of revenue include:

• Surcharge on parking fee; • Fuel tax surcharge; • Licensing fees/bounties; • Business location licenses; • Surcharge on terminal fees

Examples include:

• Financing better technology (Closed loop catalysts for angkots, scrapping of old cars, CNG buses)

• Financing non-motorised transport infrastructure improvements

• Financing public awareness campaigns

Earmarking: Allocation of revenue from a charge to a specific purpose or measure

Environmental trust fund: Revenues can only be used for funding sustainable transport measures (as exists in Mexico City)

14


Experiences in Asia

Motorization2-Wheel Motor Vehicles per 1000 Inhabitants

Russia-

Mongolia

10

China8

Japan

121

Kazakhstan-

Kyrgyzstan1

Tajikistan

-

Syria

-Jordan

0,1

Lebanon

13

Israel12

India24

Sri Lanka

28

Saudi Arabia0,4

Pakistan

12

Afghanistan

-

Iran41Kuwait-

Yemen

-

Oman

2

Burma/Myanmar

1Vietnam

45

Taiwan

462Philippines

9

Indonesia51Singapore

43

U A E

-Bangladesh

1 Thailand170

Malaysia

192Laos49

Cambodia

39

South Korea

53

Uzbekistan -Turkmenistan

-

Turkey

68

Iraq

- Nepal- Bhutan

8

NorthKorea

1

Hong Kong

5Qatar-

Bahrain3

Georgia

5

Armenia

2

Azerbaijan

1

Macau

- Brunei2

Australia16 New Zealand

13

Papua New Guinea

-

Maldives

22

Data Sources: International Road Federation (IRF): World Road Statistics 1999, Geneva 1999.The figures refer to 1996/7.

Deutsche Gesellschaft fürTechnische Zusammenarbeit (GTZ) GmbH

- Asia and Australia -

80

Motorization4-Wheel* Motor Vehicles per 1000 Inhabitants

Russia

154

Mongolia

29

China8

Japan

552

Kazakhstan86

Kyrgyzstan32

Tajikistan

2

Syria

27Jordan

66Lebanon

784

Israel262

India7

Sri Lanka

14

Saudi Arabia166

Pakistan

7

Afghanistan

3

Iran36

Kuwait

462 Yemen32

Oman

152

Burma/Myanmar

1 Vietnam-

Taiwan

221 Philippines31

Indonesia

22Singapore166

U A E

14 Bangladesh1 Thailand

103Malaysia

172Laos4

Cambodia

6

South Korea

226

Uzbekistan -Turkme-nistan

-

Turkey

68

Iraq

56 Nepal- Bhutan

2

NorthKorea

-

Hong Kong

76Qatar

330Bahrain291

Georgia

87

Armenia

2

Azerbaijan

47

Macau-

Brunei

643

Australia605 New Zealand

579

Papua New Guinea

27

Data Sources: International Road Federation (IRF): World Road Statistics 1999, Geneva 1999.The figures refer to 1996.


- Asia and Australia -

76

* Including vehicles with more than 4 wheels.

37

Fuel Prices Asia and Australiain US cents per liter gasoline(diesel in brackets) November 1998

Russia28

(18)

Mongolia23

(22)

China28

(25)

Japan102(69)

Kazakhstan30

(24)

Kyrgyzstan nn47

(27)

Tajikistan26

(13)

Syria45

(14)Jordan

42(15)

Lebanon35

(22)

Israel+ Palest. Terr .

86(31)

India56

(21)

Sri Lanka84

(30)

Saudi Arabia16

(10)

Pakistan46 (19)

Afghanistan- (-)

Iran8

(1)

Kuwait17

(13)Yemen*

26(7)

Oman31

(26)

Burma/Myanmar *

13(12)

Vietnam nnn35

(26)

Taiwan n57

(41)

Philippines nn34

(22)

Indonesia16(7)

Singapore *72

(36)

U A E105(67)

Bangladesh47

(26) Thailand30

(27) Malaysia28

(17)Laos nnn31

(24)

Cambodia47

(28)

South Korea nnnn93

(41)

Uzbekistan 11

(9)Turkme-

nistan 9 (5)

Turkey78

(47)

Iraq1

(1)Nepal*

59(24)

Bhutan*59

(26)

North Korea73

(41)

Hong Kong136(85)Qatar

16(15)

Bahrain26

(18)

Georgia46

(25)

Armenia49

(25)

Azerbaijan46

(22)

Macau74

(51)

Brunei34

(18)

Australia46

(45)

New Zealand64

(39)

Papua New Guinea41

(28)

Data Sources: GTZ Fuel Price Survey 1998 (Dr. Metschies); ADAC, Germany; OLADE; World Bank

* Price for regular gasoline** The “Untaxed Retail Pump Price” is a global hypothetical reference retail price

incl. distribution, but excl. fuel tax, VAT etc.■ Price as of 4Q 1997 ■ ■ Price as of Feb. 98■ ■ ■ Price as of June 98 ■ ■ ■ ■ Price as of May 97

For comparison: The global“Untaxed Retail Pump Price” is 21 US cents per liter super gasoline and(18) US cents per liter diesel**


136 Hong Kong

21 "Untaxed Retail Pump Price" **

1 Iraq8 Iran9 Turkmenistan

11 Uzbekistan13 Burma/Myanmar*

16 Indonesia16 Qatar16 Saudi Arabia17 Kuwait

23 Mongolia26 Bahrain26 Tajikistan26 Yemen*

28 China28 Malaysia28 Russia

30 Kazakhstan30 Thailand31 Laos31 Oman

34 Brunei34 Philippines35 Lebanon35 Vietnam

41 Papua New Guinea42 Jordan

45 Syria46 Australia46 Azerbaijan46 Pakistan47 Bangladesh47 Cambodia47 Kyrgyzstan

49 Armenia56 India57 Taiwan

59 Bhutan*59 Nepal*

64 New Zealand72 Singapore*73 Korea North*74 Macau

78 Turkey84 Sri Lanka

86 Israel86 Palest. Territories

93 Korea South102 Japan

105 U A EHong Kong 85

U A E 67Japan 69

Korea South 41Palest. Territories 31

Israel 31Sri Lanka 30

Turkey 47Macau 51

Korea North 41Singapore 36

New Zealand 39Nepal 24

Bhutan 26Taiwan 41

India 21Armenia 25

Kyrgyzstan 27Cambodia 28Bangladesh 26

Pakistan 19Azerbaijan 22

Australia 45Syria 14

Jordan 15Papua New Guinea 28

Vietnam 26Lebanon 22

Philippines 22Brunei 18

Oman 26Laos 24

Thailand 27Kazakhstan 24

Russia 18Malaysia 17

China 25Yemen 7

Tajikistan 13Bahrain 18

Mongolia 22Kuwait 13

Saudi Arabia 10Qatar 15

Indonesia 7Burma/Myanmar* 12

"Untaxed Retail Pump Price" ** 18

Iraq 1Iran 1

Turkmenistan 5Uzbekistan 9

160 150 140 130 120 110 100 90 80 70 60 50 40 30 20 10 0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160

Super GasolineDiesel

Diesel Prices in US Cents per Liter Super Gasoline Prices in US Cents per Liter

Fuel Prices as of November 1998 - Asia and Australia -Average Consumer Prices at Highway Pump in US Cents per Liter


38

Source: GTZ Fuel Price Survey 1998 (Dr. Metschies); 1 US$ = 1,66 DM = 0,85 EURO*Price for regular gasoline **“Untaxed Retail Pump Price“ is a global average price at the highway pump incl. distribution, but excluding fuel tax, VAT etc.

Elements• Area Licensing Scheme (ALS)

• Electronic Road Pricing (ERP) commencing 1998

• Vehicle Quota System

• Annual Road Tax

• Park & Ride scheme

• bus improvement & priority

• mass rapid transit system

• traffic management measures

The Singapore casePrimary objective: Congestion reduction

Positive side effects: Pollution control Revenue creation

Use of EI

16


Singapore

Economic measures

Annual road taxes

Differentiatedaccording to:

• engine capacity

• fuel type

• type of vehicle (car, motorcycle)

Electronic road pricing (1998-)

Differentiatedaccording to:

• time of day

• traffic zones

• type of vehicle

Vehicle quota system (1990-)

Certificates of Entitle-ment (COE) depend on

• growth of vehicle fleet vs. capacity

• willingness to pay (auctioning of COEs)

17


Singapore

Engine Capacity (EC) Road Tax Formula (Singapore $) < 600 cc $500 (flat rate) 600 cc - 1,000 cc $500 + 0.25 x (EC - 600) 1,000 cc - 1,600 cc $600 + 1.0 x (EC - 1,000) 1,600 cc - 3,000 cc $1,200 + 1.8 x (EC - 1,600) > 3,000 cc $3,720 + 2.5 x (EC - 3,000)

Road Tax Charges for Motor Cars (Per Annum)

Diesel Tax: 6 times the amount of computed road tax for a vehicleof the same engine capacity

If your car’s engine capacity is 1000 cc (i.e. EC = 1000),you should use the second formula as follows:

Example 1: Tax = $ 500 + 0.25 x (1000 – 600) = $ 600Example 2: Tax = $ 3720 + 2.5 x (4000 – 3000) = $ 7220

No te : 1 .0 USD = 1 .7 SGD

Example 1 (1000cc): Tax = $500 + 0.25 x (1000 - 600) = $600

Example 2 (4000cc): Tax = 3720 + 2.5 x (4000 - 3000) = $6220

18


Singapore

ECP CTE PIE Restricted Zone

Time Monday -

Friday Monday -

Friday Monday -

Friday Monday - Friday Saturday

7.30 - 8.00am $0.50 $1.00 $1.00 $0.50 $1.00

Nicoll Highway

8.00 - 8.30am $1.00 $2.50 $1.50 $2.00 $2.50

Nicoll Highway

8.30 - 9.00am $2.00 $2.50 $1.00 $2.50 $0.00

9.00 - 9.30am $0.50 $0.50 $0.50 $2.00 $0.00

9.30 - 1.00pm $1.00 $0.00

1.00 - 5.30pm $1.00

5.30 - 6.00pm $1.50

6.00 - 6.30pm 2.00

6.30 - 7.00pm $1.00

Rush-hours are more expensive

differentzones

Electronic road pricing rates (passenger cars) (May 2000)

19


Singapore

Source: http://www.lta.gov.sg, 2 May 2000

How does the ERP system work?

(1) Approach of vehicle

(2) Charging

(3) Debiting

(4-1) Verification

(4-2) Capturing photo of rear license plate

(5) Departure of vehicle

In - Vehicle Unit

1st Gantry

Antenna Camera

Road Marking

Antenna

2nd GantryOptical Sensor Detector

IU - Cashcard

(For violation only)

20


Singapore

How are Certificates of Entitlement (COE) allocated?

People bid under a specific category. If the quote is 195 then the top 195 bids are successful and pay the Quota Premium; is the price offered by the 195th bid.

The quote charge from month to month if quotas are not taken up

Month Quota Cars < 1000cc

Quota Cars 1001-1600cc

Quota Cars 1601-2000 cc

August 1997 195 1118 336 January 1998 195 1118 336 February 1998 196 1129 358 March 1998 195 115 336 April 1998 195 1133 380 June 1998 164 1205 329 April 2000 2153 555 (includes

>2000cc)

In early 1999 the average premium for cars < 1000cc was S$27,367; for cars 1001 - 1600cc S$32,610 and for big cars (1601 - 2000cc) S$30,566

21


Singapore: Results

Fairness• pricing structure that is time and congestion sensitive

• charge on a per-trip basis; shift: ownership toward use-based charges

Convenience for users and regulators• automation, electronic payment, information provision

Reliability and effectiveness• automation, traffic control and optimization

• COEs limit number of cars/amount of pollution

Strong impact/goals reached• modal split changed: public transport share rose from 46% in 1974

to over 60% today

• rising revenues, progressive extension to congested roads

22


Singapore: lessons learned

Only policy mix successful:• EI combined with strong improvement of public transport quality

• Strengthening public transport capacity

Win-win solutions achievable• environmental objectives and revenue goals are compatible

• improvement of urban living conditions goes parallel with satisfying demand for mobility

At least:

1

2

23


Experiences in Europe

21 "Untaxed Retail Pump Price" **

28 Russia34 Belarus

45 Estonia45 Moldova46 Georgia

49 Ukraine51 Lithuania

53 Romania54 Poland55 Latvia

61 Slovakia61 Yugoslavia / Serbia

65 Greece66 Bosnia and Herzegovina66 Bulgaria66 Slovenia67 Croatia

70 Macedonia72 Czech Rep72 Hungary

77 Malta78 Cyprus78 Luxembourg78 Turkey

84 Spain85 Liechtenstein86 Albania86 Switzerland

96 Germany102 Irish Rep102 Portugal

104 Austria105 Denmark

109 Sweden111 France111 United Kingdom112 Belgium112 Iceland

114 Netherlands117 Finland

119 Italy121 NorwayNorway 110

Italy 93Finland 79

Netherlands 79Iceland 40

Belgium 85United Kingdom 111

France 77Sweden 84

Denmark 85Austria 82

Portugal 71Irish Rep 102

Germany 69Switzerland 91

Albania 43Liechtenstein 89

Spain 70Turkey 47

Luxembourg 61Cyprus 25

Malta 49Hungary 64Czech Rep 60

Macedonia 46Croatia 61

Slovenia 64Bulgaria 52

Bosnia and Herzegovina 60Greece 40

Yugoslavia / Serbia 43Slovakia 54

Latvia 35Poland 44

Romania 40Lithuania 34

Ukraine 25Georgia 25

Moldova 31Estonia 36

Belarus 13Russia 18

"Untaxed Retail Pump Price" ** 18

140 130 120 110 100 90 80 70 60 50 40 30 20 10 0 10 20 30 40 50 60 70 80 90 100 110 120 130 140

Super Gasoline Prices in US Cents per LiterDiesel Prices in US Cents per Liter

Super GasolineDiesel

Fuel Prices as of November 1998 - Europe -Average Consumer Prices at Highway Pump in US Cents per Liter


Source: GTZ Fuel Price Survey 1998 (Dr. Metschies); 1 US$ = 1,66 DM = 0,85 EURO*Price for regular gasoline **“Untaxed Retail Pump Price“ is a global average price at the highway pump incl. distribution, but excluding fuel tax, VAT etc.

US cents perliter gasoline

136

Ho

ng

Ko

ng

121

No

rway

119

Ital

y11

7 F

inla

nd

112

Icel

and

112

Bel

giu

m11

1 F

ran

ce11

1 U

nit

ed K

ing

do

m10

9 S

wed

en10

5 U

A E

105

Den

mar

k10

4 A

ust

ria

102

Jap

an10

2 P

ort

ug

al10

2 Ir

ish

Rep

96 G

erm

any

94 A

rgen

tin

a93

Ko

rea

So

uth

90 U

rug

uay

86 I

srae

l86

Pal

est.

Ter

rito

ries

86 A

lban

ia86

Ug

and

a86

Sw

itze

rlan

d85

Lie

chte

nst

ein

84 S

ri L

anka

84 S

pai

n83

Gam

bia

81 C

ape

Ver

de*

81 C

entr

al A

fric

an R

epu

blic

80 B

razi

l79

Mo

rocc

o78

Cyp

rus

78 T

urk

ey78

Lu

xem

bo

urg

77 M

ali R

ep.

77 M

alta

76 N

iger

Rep

74 C

te

d'Iv

oir

e81

Mac

au73

Ko

rea

No

rth

*72

Sin

gap

ore

*72

Cze

ch R

ep72

Bar

bad

os

72 H

un

gar

y72

Bu

run

di*

72 R

wan

da

71 S

eneg

al70

Mac

edo

nia

70 K

enya

70 C

had

*68

Bu

rkin

a F

aso

68 G

uin

ea*

67 C

roat

ia66

Bu

lgar

ia66

Bo

snia

an

d H

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go

vin

a66

Slo

ven

ia65

Gre

ece

64 N

ew Z

eala

nd

64 C

amer

oo

n63

Gab

on

63 T

anza

nia

*61

Yu

go

slav

ia /

Ser

bia

61 S

lova

kia

60 T

un

esia

59 N

epal

*59

Bh

uta

n*

59 M

auri

tan

ia59

Hai

ti57

Tai

wan

56 I

nd

ia56

Su

rin

ame

55 P

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55 L

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a55

Mo

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54 E

l Sal

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54 G

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54 P

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53 B

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ia53

Ro

man

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Zam

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*51

Lit

hu

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51 M

alaw

i50

Cu

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50 H

on

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ras

50 F

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*49

Arm

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49 U

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49 C

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47 P

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47 B

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47 K

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Cam

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47 M

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r47

Nic

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46 P

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tan

46 A

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aija

n46

Geo

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46 A

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45 S

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45 M

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45 E

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43 S

ou

th A

fric

a42

Jo

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42 T

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o R

ep41

Co

sta

Ric

a41

Pan

ama

41 G

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Can

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41 P

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ea40

Do

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Rep

ub

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Tri

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To

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Ben

in39

Les

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go

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Ecu

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Nam

ibia

*37

Eri

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*37

Jam

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37 S

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Eth

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36 M

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Leb

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Vie

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35 U

nit

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s (h

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)34

Bel

aru

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Ph

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Bru

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34 P

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to R

ico

33 S

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32 U

nit

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tate

s (a

vera

ge)

32 G

han

a31

Alg

eria

31 L

aos

31 B

ots

wan

a31

Om

an30

Kaz

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stan

30 U

nit

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s (l

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)30

Gu

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a30

Th

aila

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29 E

gyp

t28

Mal

aysi

a28

Ru

ssia

28 C

hin

a26

Yem

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26 T

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n26

Bah

rain

26 Z

imb

abw

e*24

Co

lom

bia

23 M

on

go

lia22

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17 K

uw

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16 I

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16 S

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i Ara

bia

16 Q

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14 V

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a13

Nig

eria

*13

Bu

rma*

11 U

zbek

ista

n9

Tu

rkm

enis

tan

8 Ir

an1

Iraq

114

Net

her

lan

ds

120

140

100

80

60

40

20

0

“Untaxed Retail Pump Price“ **: 21 US cents

Globalization of Fuel Market: Transition to US or EU/Japan Taxation Concepts, Part II: Gasoline

Gasoline* Prices as of November 1998Average Consumer Prices at Highway Pump in US Cents per Liter

* In most cases the prices given refer to super gasoline. Only in those countries marked with * the quality is “regular“.** The “Untaxed Retail Pump Price“ is a hypothetical reference retail pump price for super gasoline

including distribution and VAT but excluding fuel tax.*** According to the agreed upon EU minimum taxation (“Acquis Communautaire“). NOTE: Greece is still below EU standard.


Category I:Gasoline prices below "Untaxed Retail Pump Price" **

Category II:Gasoline prices between"Untaxed Retail Pump Price" **and highest US level

Category IV:Diesel prices at EU and Japanese level

Category III:Gasoline between highest US level andminimum EU level *** (transition range)

5 T

urk

men

ista

n

111

Un

ited

Kin

gd

om

110

No

rway

102

Iris

h R

ep93

Ita

ly

89 L

iech

ten

stei

n85

Bel

giu

m85

Den

mar

k85

Ho

ng

Ko

ng

84 S

wed

en82

Au

stri

a79

Fin

lan

d79

Net

her

lan

ds

77 F

ran

ce72

Rw

and

a71

Po

rtu

gal

70 S

pai

n69

Ger

man

y69

Jap

an68

Ug

and

a67

U A

E66

Bu

run

di

65 C

entr

al A

fric

an R

epu

blic

64 H

un

gar

y64

Slo

ven

ia63

Gam

bia

62 B

arb

ado

s61

Ch

ad61

Cro

atia

61 L

uxe

mb

ou

rg60

Bo

snia

an

d H

erze

go

vin

a60

Cze

ch R

ep57

Tan

zan

ia56

Gu

inea

54 K

enya

54 S

lova

kia

52 B

ulg

aria

52 N

iger

Rep

51 M

acao

50 B

urk

ina

Fas

o49

Mal

ta49

Zam

bia

48 C

amer

oo

n48

Mal

i Rep

.48

Sen

egal

47 M

oro

cco

47 T

urk

ey46

Mac

edo

nia

45 A

ust

ralia

45 C

te

d'Iv

oir

e45

Mal

awi

44 P

ola

nd

43 C

ape

Ver

de

43 A

lban

ia43

Yu

go

slav

ia /

Ser

bia

42 A

rgen

tin

a42

Uru

gu

ay41

Ko

rea

No

rth

41 K

ore

a S

ou

th41

Gre

nad

a41

Mo

zam

biq

ue

41 S

uri

nam

e41

Tai

wan

40 G

reec

e40

Ice

lan

d40

Ro

man

ia39

Can

ada

39 G

abo

n39

New

Zea

lan

d39

So

uth

Afr

ica

38 L

eso

tho

37 T

og

o R

ep37

Fiji

Is36

Est

on

ia36

Hai

ti36

Nam

ibia

36 S

ing

apo

re36

Sw

azila

nd

35 B

oliv

ia35

Lat

via

35 N

icar

agu

a34

Bra

zil

34 L

ith

uan

ia33

Jam

aica

33 M

adag

aska

r33

Per

u33

Tu

nes

ia32

Gu

atem

ala

32 P

uer

to R

ico

31 B

enin

31 I

srae

l31

Pal

est.

Ter

rito

ries

31 M

auri

tan

ia31

Mo

ldo

va31

Un

ited

Sta

tes

(hig

h)

30 E

l Sal

vad

or

30 G

han

a30

Ho

nd

ura

s30

Sri

Lan

ka29

Bo

tsw

ana

29 C

hile

28 C

amb

od

ia28

Co

sta

Ric

a28

Mex

ico

28 P

anam

a28

Pap

ua

New

Gu

inea

27 G

uya

na

27 K

yrg

yzst

an27

Th

aila

nd

27 U

nit

ed S

tate

s (a

vera

ge)

26 B

ang

lad

esh

26 B

hu

tan

26 S

ud

an R

ep26

Un

ited

Sta

tes

(lo

w)

26 V

ietn

am26

Om

an25

Arm

enia

25 C

hin

a25

Cyp

rus

25 E

thio

pia

25 G

eorg

ia25

Ukr

ain

e24

Ecu

ado

r24

Kaz

akh

stan

24 L

aos

24 N

epal

24 P

arag

uay

23 E

ritr

ea22

Aze

rbai

jan

22 D

om

inic

an R

epu

blic

22 L

eban

on

22 M

on

go

lia22

Ph

ilip

pin

es22

Zim

bab

we

21 I

nd

ia20

Co

lom

bia

20 T

rin

idad

an

d T

ob

ago

19 A

ng

ola

19 P

akis

tan

18 B

run

ei18

Bah

rain

18 C

ub

a18

Ru

ssia

17 L

ibya

17 M

alay

sia

16 A

lger

ia15

Jo

rdan

15 Q

atar

14 S

yria

13 B

elar

us

13 T

ajik

ista

n13

Ku

wai

t12

Bu

rma

12 E

gyp

t10

Nig

eria

10 S

aud

i Ara

bia

9 U

zbek

ista

n8

Ven

ezu

ela

7 In

do

nes

ia7

Yem

en

1 Ir

aq1

Iran

91 S

wit

zerl

and

US cents perliter diesel

120

100

80

60

40

20

0

“Untaxed RetailPump Price“ **: 18 US cents

Characteristics:Level of taxation often too low to guarantee average USroad user fee of 10 US cents per liter

Characteristics:European concept of financing roads,other transport services (cross-subsidies)and state budget (partly)

Characteristics:Associated countries (LOME Convention and Mediterranean Countries) aswell as EU applicant countries still below EU entry requirements (AcquisCommunautaire of 33 US cents per liter government taxes)

50

Source: GTZ Fuel Price Survey 1998 (Dr. Metschies); 1 US$ = 1,66 DM = 0,85 EURO**The “Untaxed Retail Pump Price“ is a global retail price for diesel incl. distribution, but excluding fuel tax, VAT etc.Deutsche Gesellschaft fürTechnische Zusammenarbeit (GTZ) GmbH

Category I:Diesel prices below "Untaxed Retail Pump Price" **

Category II:Diesel prices below or at US level

Category IV:Diesel prices at EU and Japanese level

On the transition to EU and Japanese standards

Category III:Diesel prices between US and minimum EU level

Characteristics:No fees or taxes to financeroads or state budgets

Globalization of Fuel Market: Transition to US or EU/Japan Taxation Concepts, Part I: Diesel

Diesel Prices as of November 1998Average Consumer Prices at Highway Pump in US Cents per Liter

Fuel tax differentiation

Leaded fuel is ... % more expensive than unleaded

Note: Germany phased leaded fuel out in 1996

Prozent

0

2

4

6

8

10

12

14

Aus

tria

Belg

ium

Cze

ch R

epub

lic

Denm

ark

Finl

and

Fran

ce

Ger

man

y

Gre

ece

Hun

gary

Irela

nd Italy

Luxe

mbo

urg

Net

herla

nds

Nor

way

Pola

nd

Portu

gal

Spai

n

Swed

en

Switz

erla

nd

Uni

ted

King

dom

1990

1995

25


price in 1999 thereof taxesgasoline (reg.) 1.96 1.20CNG 1.20 0.20Diesel 1.50 0.72Biodiesel 1.20 subsidized

Fuel tax spread in Germany (approx., DM)

Fuel tax burden

Source: Aral (1998): Verkehrstaschenbuch 1998/99. Bochum: Aral, p. 437

26


Fuel taxation in Germany

Fuel tax rates in DM/liter

0.4

0.5

0.6

0.7

0.8

0.9

1

1.1

1.2

1.3

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

unleaded gasoline leaded gasoline diesel

27


German emission-related vehicle tax

Annual emission-related vehicle tax in Germany(in DEM/100 ccm per year)

1998

28


Vehicle taxation in Germany

1) Emission Tax IncentivesPhase 3 (2000-2004): tax reduction of 250 DM if emission standards are already met today

EU-Phase 4 (2005-2008): tax reduction of 600 DM if emission standards are already met today

2) CO2 Tax IncentivesTax reduction of 1000 DM if- vehicles emit < 90g CO2/km

Tax reduction of 500 DM if - vehicles emit < 120g CO2/km- first registration before 1/1/2000

Emission standards for gasoline engines

0

0.5

1

1.5

2

2.5

CO HC + NOx HC NOx

emissions g/km

German Phase 2 German Phase 3 EU-Phase 4

29


Trondheim (Norway)

Road pricing: toll ring of Trondheim – main factors

Objectives:revenue raising; traffic/congestion reduction;urban air quality

Local conditions:pop. 140,000;0.5 cars/inhabitant;many small streets

Social concerns:frequent users, etc.

• Fee for cars entering city centre

• Differentiated rate structure

30


Trondheim’s toll ring

Elements of the strategy1. 17 electronic toll stations:

register traffic on access roadselectronic payment lanes to avoid queues

2. Differentiated tolls

3. Cars equipped with electronic tag

4. Limited duration of the system (1991-2006)

5. Contracting-out of toll stations

6. Revenues earmarked for transport investment

7. Additional funding for road building, public transport, safety and environmental projects

Rate structure• pay only once per hour on

entry

• basic toll level 1.5 Euro

• heavy cars (> 3.5 t) pay double

• maximum fee per month: 60 payments (90 or 180 Euro)

• free entry after 6 pm on workdays

• free entry at the weekends

31


Trondheim: results

Greater road use efficiencyChanges in transport mode (from car to bicycle and walking), traffic reduction during rush hour, traffic increase on evenings and weekends, fewer congestions

Better environmental performanceLess pollution

Rise in “living conditions”Fewer waiting hours for public transport or in congestion, fewer delays in transport of goods, large public agreement for system

Revenue creation

32


Trondheim: lessons learned

Importance of public support for success of measure• Achieved through public awareness campaigns

• social and business concerns matter (traffic reduction for “environmen-talists”, transport capacity strengthened for “motorists”)

Contracting out/privatization helpful

Only a policy mix will be successful• Toll combined with strong support for public transport

33


Critical factors

Successful EI strategy implementation depends on:

Institutional/regulatory strength (enforcement, monitoring, control abilities)

Price and income elasticities of demand

Removal of counter-productive subsidies (e.g. diesel-subsidies)

Strategic considerations (e.g. competitiveness concerns)

Lobbying activities (e.g. preference for voluntary agreements; information dissemination & widespread public support)

34


(Un-) critical factors

“... three specific concerns are frequently raised concerning the introduction of environmental taxes:• The stability of revenue. Apart from taxes on energy and

transport the principal goal of environmental taxes is not to raise large amounts of revenue. In addition, a reduction in the tax base related to environmentally-harmful products or activites is a desirable outcome of this kind of taxation

• adverse distributional effects. Regressive effects may be countered by compensating lower income groups through reductions in assessible personal income tax;

• competitiveness and economic growth. Environmental taxes do not appear to have had a negative impact on competitiveness ...“

Source: OECD, Environmental Taxes - Recent Developments in China and OECD countries. Paris, 1999; p. 8

35


Critical factor: elasticities

Empirical results (OECD)

Very long reaction horizons for EI ...• 1-year price elasticity of gasoline demand: even a large price hike

will hardly have any visible effects! Studies in many OECD countries show an average short run price elasticity of approx. - 0.05 to - 0.1

• >10-year price elasticity of gasoline demand: in the long term price elasticity is generally about double the short term elasticity amount

Fuel prices must rise faster than the inflation rate and the rate of income growth

36


EU experiences on local EI

Strategies should be based on combinations of measures, and should draw fully on the synergy between success measures

Economically efficient measures include low cost improvement to road capacity, public transport and increases in costs of car use

In most cases economically efficient strategies can be designed which are financially feasible, provided that revenues can be used to finance other strategy elements

Public acceptability will be a significant barrier with measures which reduce service levels of increase costs (this implies the need for effective public relations campaigns, and carefully designed implementation procedures

Taken from: EU Transport RTD Programme, http://europa.eu.int/en/comm/dg07/extras/res-optima.htm

37


Experiences in Surabaya

14

218

of road length per person that was well below the Canadian, Australian or American figures.

Seoul also had an unusually high figure for road density, but with a very high urban density in

Seoul, this equated to a very low figure for road length per person58. There is no obvious

systematic variation in road density between the regions, with density, nor with income. Only

Tokyo’s exceptional road density level exceeds Ingram and Liu’s (1997) figure for a statistical

threshold level for urban road density of 230 metres per hectare (which was mentioned in

Table 2.1).

Figure 6.4 Road network density (metres of road per urban hectare) compared with

road length per person in Asian cities and regional averages of an international sample

of cities, 1990

0.3 0.3 0.50.6 0.6 0.8

1.11.5

2.4

3.9

4.7

6.8

8.3

60

8392 89

123

192

92 89

114

273

131

88101

0

50

100

150

200

250

300

Roa

d D

ensi

ty (m

etre

s per

ha)

0

1

2

3

4

5

6

7

8

9

Roa

d L

engt

h pe

r C

apita

(met

res)

Sura

baya

Hon

g K

ong

Jaka

rta

Ban

gkok

Ma

ni l

a

Se

ou

l

Sing

apor

e

Kua

la L

umpu

r

Euro

pean

Tok

yo

Can

adia

n

Am

eric

an

Aus

tral

ian

Road network density

Road length per capita

Data on main road provision show similar patterns (Figure 6.5). Main road density also varies

relatively little across many cities in the sample. If anything, some of the higher density Asian

cities tended to have slightly higher arterial road densities than others (the Asian cities’ average

was 29 metres per hectare, while for the non-Asian cities in Figure 6.5, the average was 18

metres per hectare). Yet, the Asian cities, especially the highest density ones, had very low

58 It is suspected that the high road density figures in Tokyo and Seoul are, to some extent, the result of the inclusionof many small alleys in the road length figures. Many such alleys in Seoul and Tokyo are passable to cars, but onlyjust barely, and carry almost no four-wheeled traffic. These alleys are essentially for non-motorised traffic.

ROAD NETWORK DENSITY (ROAD METRES PER HECTARE) AND ROAD LENGTH PER PERSON, 1990

Road length per capita:• Severe implications for congestion and vehicle speeds.• Figures projected for vehicle speeds have severe implica-tions in terms of pollution (discussed below).

Context for EI in Surabaya & Jakarta

Road network density and road length per capita, 1990

Source: Barter 1999

39


Karl Fjellstrom

EI opportunities for Jakarta

Strategic opportunities for EI for city govt.:• Take responsibility for revenue from

congestion pricing and its allocation within the transport sector

• Strengthen the revenue stream for car parking already within its control

• Seek arrangements with the private sector for contribution and partner-ship in the provision of infrastructure and servcies

Under consideration...

• Congestion pricing; road pricing on Jl Sudirman/Jl Thamrin

• Transport demand management

• Parking schemes (Increase revenue from Rp 6 billion in 1999/2000, to Rp 16 billion in 2000/2001)

• Area traffic control

• Bus improvements and priority

40


EI in Surabaya: current situation• Some EI applied in Surabaya

• Focus on fiscal goals

• Environmental effects merely side effects

• No consistent local sustainable transport strategy

Existing EI includes:• Vehicle Sales Tax and Import Duty

• Annual Vehicle Tax (Pajak Kendaraan Bermotor, PKB)

• Vehicle Transfer Tax (Bea Balik Nama-Kendaraan Bermotor, BBN-KB)

• Fuel Taxes

• PKB Reduction for Public Transport Vehicles

• Parking Charges

41


The road ahead

Guiding principles:Develop policies to reduce demand for private vehicle travel (incl. motorcycles); incentives for more environmentally-friendly fuels & technologies; encouragement of public transport

Core elements of an EI reform approach:• Make motor vehicle use more expensive (eliminate fuel subsidies)

• Parking charges reform (restricted parking zone)

• Direct pricing mechanism (corridor/screenline/area licensing)

• Incentives for more environmentally-friendly fuels & technologies

• Environmental trust fund for sustainable transportation measures

• Government commitment to ensuring a viable public transport industry through realistic fares and minimising imposition of extra costs

42


Vehicle Tax & Transfer Tax reform

Status quoTax authority: Provincial level

Tax base: PKB and BBN-KB based on vehicle age, engine size and market value

Lower tax for old vehicles

Short term• Raise PKB and BBN-KB

(planned)

• In effect in Jakarta since March 2000

Medium termBase PKB and BBN-KB on emission intensity (engine size)

43


East Java PKB revenue 1999/2000

Source: Renbang, Dispenda Tk.I Jawa Timur, 1999

PKB revenue target based on previous year and trend

Type of Motor Vehicle

Number of Vehicles

Revenue (Million

Rupiah) Motorcycles 2,516,967 78,350

Sedan 89,826 35,200 Jeep 44,908 12,350

Station Wagon 225,652 42,300 Bus 9,657 3,700

Truck 206,187 48,100

Total

220,000

44


Raise fuel tax/reduce fuel subsidy

Status quoTax authority: Central and provincial level

Fuel taxes unrealistically low: Indonesia spends 24.7 trilliun Rp. annually for fuel subsidies

Short termReduce the fuel subsidy/raise the fuel tax, step by step

Measure is very unpopular,

but it must be done

45


Fuel prices May 2000

1) Source: SUTP GTZ; Includes VAT of 10 percent2) Source: Metschies, G. (1999): Fuel Prices and Taxation. GTZ, p. 90. Price is for August 19993) Based on May 2000 exchange rate of Rp 7900 per US$4) Based on August 1999 exchange rate of Rp 7000 per US$

Unit Gasoline Diesel Kerosene

Current Domestic Price1) Rp/liter 1,000 550 280

US$/liter3) 0.13 0.07 0.035

Untaxed Retail Fuel Pump Rp/liter 1,470 1,255 n.a

Pump Price 2) US$/liter4) 0.210 0.180 n.a

46


Parking fee revenues in Surabaya

Source: Dinas Perparkiran Kota Surabaya, 1999

Revenue collected by Dinas Perparkiran

* 1998/99 revenues declined due to removal of several charges pursuant to Inmendagri No. 10/1998

0

2

4

6

8

10

12

1995/96 1996/97 1997/98 1998/99

Rp. billion

*

47


Parking charges reform

GoalsRestricted parking zone for reduction of passenger car unit trips through the city centre, through transport demand management.

Reduced congestion, energy use, pollution, land dedicated to transport, and accidents

Short/mid term• Apply high charges in

defined CBD areas

• In Surabaya charges required on main traffic routes in central area (approx 35km main roads)

• Higher prices for all-day parking

Authority: municipal

48


Area licensing scheme in Surabaya?

Source: Surabaya Integrated Transport Network Study II, Report No.B3: Transport Demand Management and Traffic Restraint Policies in Surabaya

Status quoAllowing for all expected road network improvements, it will be necessary by 2010 to deter about 33% of all vehicles (50% of all cars) from entering or crossing the CBD in the morning peak, to avoid intolerable congestion.

Currently no policy to reduce transport demand.

After indirect restraint mechanisms have

taken effect• ALS similar to Singapore

• Charge Rp 80,000/month

• Improve traffic congestion, road safety, and air quality

• Revenue of Rp 64 billion in 1st year of operation if implemented by 2006.

Discourage car drivers with a mix of physical, administrative & pricing controls

49


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