TOWARDS SUSTAINABLE
TRANSPORTATIONOECD International Conference, Vancouver Canada
TOWARDS SUSTAINABLE
TRANSPORTATION
One of the most significant barriers to the development of more sustainable transportation systems in many countries is the manner in which motorists pay (or are subsidized) for their motor vehicle use. High fixed costs of motor vehicle acquisition combined with low incremental motor vehicle user costs (e.g. free parking, free roads, and in some countries like the U.S., very low motor fuel taxes) encourage rapid growth of motor vehicle use. Major institutional and political factors impede public awareness of large hidden subsidies and external costs related to transportation. These are an obstacle to introduction of market-based pricing mechanisms that might better internalize both marginal costs and social and environmental cost factors, thus shaping decision-making by consumers and policy-makers. This paper explores these economic and perceptual barriers and discuss strategies that might contribute to progress in both cost internalization and regulatory reform, with particular attention on the American situation, where highway user subsidies significantly exceed those of many other OECD countries.
The most promising strategy for incrementally overcoming these barriers is through introduction of a customer-orientation to transportation innovation, bundling technological, pricing, and institutional reforms with major new transportation investments. Contributions can come from: improved information; analysis and decision support systems for transportation management and planning; appropriate applications of Intelligent Transportation Systems technologies such as electronic road and parking pricing; development of performance and incentive based regulatory systems; privatization of infrastructure management; and by influencing advertising that shapes public attitudes towards motor vehicles.
Key issues that must be addressed include equity impacts and political/institutional structures that favor continued pricing systems and subsidies that promote greater motor vehicle use. In democratic societies, public and market acceptance of a shift to fuller marginal cost pricing of transportation will follow only if users who experience higher user costs gain improved system performance, if the array of attractive alternatives and choices is expanded particularly for the most price-sensitive users, and if information and marketing emphasizes positive attributes and a customer service orientation. Meeting these conditions will require reform of public institutions involved in transportation to force greater accountability for the effects of transportation system management and investments on system performance, including externality effects.