Overview
The European Commission's policy papers 'Towards fair and efficient pricing in transport' and 'Fair payment for infrastructure use', have placed transport pricing high on the policy agenda. These papers advocated principles for pricing, but raised questions about its practical implementation. Therefore, a number of research projects have been commissioned covering specific issues.
The purpose of CAPRI was to facilitate the transfer of information from research projects dealing with the pricing of transport. Key objectives were to:
- aid dissemination of results to Member States and other stakeholders;
- develop a synthesis of research findings;
- help to build a consensus on the implications for policy.
Funding
Results
CAPRI drew conclusions in six areas (pricing principles, valuation of externalities, road pricing, rail and other public transport, air transport, and the likely impacts of pricing policy). These were based on EC-funded research as well as other evidence from inside and outside the EU.
Pricing principles - Pricing policy should be based on an understanding of marginal social costs, where the user pays the costs that they cause through additional infrastructure use. This will not deter trips that offer a net benefit to society, but it will discourage trips where the benefit to the individual user is less than the cost to society as a whole. Marginal social costs should be used as the starting point for price determination, with other important considerations such as financial needs incorporated in a way that does least damage to society's welfare. One of the main implications of pricing based on social costs is that prices should vary to a greater extent according to location and travel time.
Valuation of externalities - All of the main externalities (air pollution, global warming, congestion, accidents etc.) can be taken into account in pricing structures, even though some uncertainty exists in their estimation. CAPRI recommended specific evaluation methods for particular impacts.
Road pricing - Greater differentiation in road charges by time period and area is necessary to cope with congestion resulting from heavy peaks in travel demand. The main impact is likely to be travel at different times or by different routes, rather than a change in mode. To increase acceptability, the introduction of pricing should be staged, starting with simple systems with low charge levels, and the revenue allocated for specific spending programmes such as public transport.
Rail and other public transport - Efficient pricing is likely to require greater peak/ off-peak differentials, and also an element of government funding (particularly for short-distance urban services). Improving the service quality and investment in infrastructure may be the most important measures for improving modal share, as opposed to internalisation of externalities for all modes via the pricing mechanism - this is particularly the case for freight transport.
Air transport - Environmental pricing can be based on fuel consumption and/or landing and take-off operations, but policy development in this area requires furth
Policy implications
The existing range of pricing policies in EU Member States is so varied that the impacts of marginal cost pricing have to be assessed on a case-by-case basis. The extent and direction of any price changes will depend strongly on current levels of taxation and charging, and will not necessarily imply lower travel demand. Nevertheless, as a broad conclusion, pricing reform to reflect social marginal cost would involve:
- a decrease in prices for inter-urban road and rail passenger transport and an increase in the price of urban road travel (particularly for the private car);
- an increase in prices for both road and rail freight.
Regulatory policy may often be more powerful than pricing policy in the control or reduction of some categories of environmental emission, such as noise. For emissions of greenhouse gases, CAPRI recommended that pricing should be based on political decisions about target emission levels, given the lack of consensus about the values to be placed on each tonne of pollutant.