European Transport Trends and Environmental Policy: Doubts and Possible Strategies

This paper shows that the present European policy of creating incentives for a modal shift (mainly for environmental objectives) from private to public transport presents high public and social costs, and very questionable results. This is for every component of the external costs: air pollution, CO2 emissions, congestion, and accidents. Furthermore, even in the case that this policy would be successful (a highly unlikely result, after so many years of attempts), the environmental benefits will be very limited. Finally, the main alternative policy, in an effort to reduce external cost via technological improvements of road vehicles even under the more prudent assumptions (i.e., relaying on already-existing technology, etc.) will present lower social costs. In order to provide more conservative values (given the high uncertainties related to this issue), the authors will refer mainly on the U.K. figures, that present a situation of relatively weak support for public transport, and the lowest share of transport demand by public transport. Finally, a simplified social surplus estimate of the considered alternative policies will corroborate the factual results shown by the main figures presented in the paper. Further research guidelines are eventually suggested on some of the issues that were presented in the paper.