Taxation futures for sustainable mobilityResearchers
Dr Stephen Potter
Dr Graham Parkhurst Institution
The Open University
University of the West of England
Summary of Project
Project
Update
Researcher Profiles
Researcher
Contact Details
Publications
Annual
progress report - 2003 (pdf format)
Final
report (pdf format)
Summary
In the UK, there have been
substantial practical and political difficulties in using economic instruments
to encourage more sustainable forms of transport. Policy seems to have shifted
away from attempting behavioural changed to tax concessions on cleaner vehicles
and funding public transport schemes. Yet research shows the impossibility of
sustainable mobility without efficient price signals. This project integrates
a number of research activities to explore key factors in a successful restructuring
the car taxes and charges regime, including: - Modelling
the tax concessions to establish low carbon cars in the UK;
- Estimating
the decline in UK government revenues from motoring taxation if energy efficient
cars and alternative fuels become widespread;
- Using
s Dutch model of traffic and emissions reduction from a fiscally-neutral replacement
of existing motoring taxes by a distance charging system;
- Empirical
studies of the environmental effects of distance charging used in European Car
Clubs Scenarios will be developed to provide estimates of the transport and environmental
effects of different tax scenarios and other key effects. Seminars and workshops
with users will help this project set an agenda for further research and policy
actions.
Background
and Rationale
Personal mobility is a particularly difficult environmental
policy area. Economic instruments are widely advocated to address environmental
impacts, but changes to transport taxation to affect human behaviour have seemingly
disappointing results and generate powerful political opposition. This was demonstrated
by the fuel duty protests of September 2000. Subsequently government reduced road
fuel and vehicle taxation and has moved towards tax concessions to low carbon
vehicle technologies. Yet research continues to emphasise the impossibility of
achieving anything approaching sustainable mobility without the use of efficient
price signals. Added
to the political failure of economic instruments to influence car use, there is
a second consequence. With price signals used to favour low carbon vehicles, tax
revenues from cars and fuels have started to drop, and could dramatically decline.
Overall there
is a growing and seemingly intractable problem of personal mobility and the environment.
Because car ownership is such a central feature of our lives it is viewed as political
suicide for any government to raise vehicle or fuel taxation to a level that will
produce significant behavioural change. Added to this the level of tax concessions
needed for the adoption of cleaner car technologies (which alone will not deliver
sustainable mobility) will result in a large drop in tax revenues. Key
Research Question
Trying to change the pricing signals within the existing
transport tax and charging regime that was not designed to influence behaviour
appears to have failed. This has not been entirely accepted, but UK and international
experience of the last decade is increasingly moving towards this unfortunate
conclusion. Therefore, instead of modifying existing tax measures, could a different
car taxation structure be more amenable to policies providing behavioural change
signals, maintain government income, and be politically acceptable? Research
Approach
This project will essentially synthesise existing research
by a number of people who have explored different ways in which the taxation and
charging regime could be structurally altered to be more amenable to the effects
of pricing signals. The project will synthesise the two key drivers for addressing
the transport taxation system, which are: a)
The potential of alternative car taxation regimes to deliver effective pricing
signals reflecting environmental costs; and simultaneously
b) Its introduction in a fiscally-neutral way that maintains taxation income from
car purchase ownership and use. A
series of scenarios will be developed which will be assessed for their tax income
and ability to deliver effective environmental signals to car users. A version
of the Dutch Scenario Verkenner (Scenario Explorer) will be used to provide a
detailed estimate of the transport and environmental effects of the different
tax scenarios. The project will commence with one or more seminars for user groups
and following this an advisory group will be appointed to comment upon the integration
of the team's existing research into the scenario development. The project would
conclude with a series of seminars to users and the production of a report. Intended
outcomes
-
To synthesise existing research by a number of people who have explored different
ways in which the taxation and charging regime could be structurally altered to
be more amenable to the effects of pricing signals;
-
To provide a framework in which alternative transport taxation and charging regimes
can be explored;
-
To identify what conditions, supporting measures and technologies would be needed
for the alternative regimes;
-
To identify an agenda for future research on the issue of appropriate taxation
regimes for use with sustainable transport technologies and behaviour patterns;
-
To undertake this research in a way that actively involves policymakers and implementation
agencies.
Researchers 
Dr Stephen Potter
Dr
Stephen Potter has for over 20 years conducted research on the relationship between
transport policy, taxation and the environment. This has included work in the
1980s on company car taxation and participating in a major CEC project for DG
TREN that reviewed EU transport taxation systems (http://www.epommweb.org/links_frame.html).
In 2001/2 he led a project for the Department for Transport on tax reforms to
support Travel Plans (http://www.dft.gov.uk/itwp/modalshift/index.htm).
Recommendations from this were incorporated into the 2001 and 2002 budgets. Other
work has included exploring how new ways to pay for car use could change behaviour
and environmental impacts, for example through Car Clubs. 
Dr Graham Parkhurst
Dr
Graham Parkhurst has been involved in transport studies since 1991, and in particular
has conducted research on the unintended effects of transport policies, notably
the role of market costs and subsidies in encouraging car use amongst travellers
in response to the provision of park and ride opportunities. In recent years his
research has considered the secondary effects on transport policy and taxation
of new kinds of road vehicle and fuel; and technological changes necessary to
achieve reductions in energy consumption and emissions, but with implications
for the magnitude of tax contributions to the Treasury and the means by which
they are collected.
Project Update October 2003 The
project update is available
as a PDF.
Contact Details Dr
Stephen Potter
Senior Research Fellow
Department of Design and
Innovation
The Open University
Walton Hall
Milton Keynes MK7 6AA
Dr
Graham Parkhurst
Senior Lecturer in Transport Planning
Faculty of the Built Environment
University of the West of England
Frenchay
Campus
Coldharbour Lane
Bristol BS16 1QY
Publications Further
publications issued by this project are available from the authors on request. Changes
in the cost of motoring and implications for the public transport sector (pdf)
Graham
Pankhurst European perspectives
on a new fiscal framework for transport (pdf)
Stephen Potter and Ben Lane
Project update
(pdf)
October 2003 | 
