Press
Pack: T&E seminar on Fuel prices and the environment,
European
Parliament, 28/11/’00
Contents
During the widespread fuel price protests the environmental arguments for high transport charges were absent from the debate or marginalized; When the environmental argument was put forward it was frequently advanced either by journalists during interviews with fuel protesters, or by environmentalists who do not usually follow transport policy.
This meeting is to advance the level of this debate by bringing together those that usually work at the interface between environmental and transport policy.
The fuel price question will return to the agenda again. The Commission has to rule on the legality of the concessions granted by Member States in the face of the protests. Whatever they decide this decision is likely to provoke protests either by the original protestors or by those in “competing” Member States.
There has been an understandable assumption that high fuel taxes are environmentally beneficial, and that they are the most appropriate way to combat transport’s contribution to climate change. However, those that work in transport know that fuel taxes are a blunt and inflexible policy instrument that has had little impact in changing transport patterns.
There is also a widespread public perception that fuel taxes have been used by governments as a method to raise revenue rather than as a instrument of transport or environment policy. In many member States this public perception is accurate.
Whilst there is widespread public support for action to stem rising fuel prices there is also widespread public support for action to counter environmental problems, particularly global warming. The policy makers’ dilemma is therefore to reconcile the public desire both for a fair rate of fuel tax alongside action to stem climate change and transport’s contribution to it.
However this is not an impossible goal. The increasing of transport prices is not the same as the increasing of fuel prices. Far more flexible methods of relating transport taxes to environmental performance are at the disposal of governments. These provide the opportunity to reduce fuel prices whilst substituting a much fairer system of transport taxes overall.
If this is to happen then the taxes must relate to the environmental and social impacts of transport. They must also exert an influence over the demand for transport, and the selection of what form, or “mode”, the transport takes. Examples of the type of instruments available for road transport and the impacts they approximate are:
· Electronic KM charge for heavy goods vehicles, moderated by
i. Emissions class of vehicle air pollution
ii. Location noise / air pollution
iii. Time congestion / Noise
· Annual circulation tax varied by emissions class Air pollution
· Vehicle purchase tax varied by emissions class Air pollution
· Fuel tax (lower) Greenhouse gas emissions
· Increased parking charges Modal split
· Increased public transport investment and subsidy
Modal split
There is a difference between the level and type of taxes that will be ideal for the economy as a whole (including environmental considerations) and punitive tax rates applied in an inflexible manner. The goal should be to shape transport volumes and patterns so as to minimise the environmental and social impacts of transport.
This requires a move away from fuel taxation to a basket of mutually reinforcing measures. Constantly striving to make transport fuel costs rise to cover environmental and social damage may only result in the economically expensive result of people continuing to pay large amounts to pollute. Far better will be to elaborate the incentives and penalties that together will reduce the environmental and social damage that transport currently causes.
·
T&E
is committed to the principle of fair and efficient pricing, but fairness and
efficiency must be defined in terms of overall societal objectives including
environmental and social ones, not merely the economic interests of
infrastructure users or others.
·
A
framework of societal goals and objectives must determine decisions on both
pricing and investment. This framework must cover environmental and social
goals as well as economic ones in order to ensure sustainable accessibility for
all citizens. This will require a broad range of measures, and goes far beyond
what is required to achieve the short-term efficient use of any one piece of
infrastructure.
·
Pricing
the use of infrastructure and investment decisions are two separate issues, and
must be treated separately. The Commission’s White Paper on infrastructure
charges and the High Level Working Group have not maintained this distinction,
and are in danger of confusing the two.
·
Specifically,
there is no logical case for applying the revenues from infrastructure pricing
directly to investment in additional infrastructure, or the maintenance of
infrastructure, or even for retaining all revenues within the transport sector
as a whole. Instead, revenues should be allocated to the areas affected by the
infrastructure, and democratic decision-making processes should be allowed to
determine without preconditions how the revenues are spent.
·
Equally,
decisions on infrastructure investment should be made on the basis of a full
and effective cost-benefit analysis. They should not be driven or determined by
the revenues which are or might be raised, either through infrastructure
charging or through other forms of taxation.
·
Social
marginal costs are an important guide to help set fair and efficient prices,
but will not on their own result in an outcome which is optimal for society as
a whole. Other, non-pricing measures will also be needed, and may improve
efficiency in many cases. These measures will help to establish a proper market
framework and to achieve other societal objectives.
·
For
this reason, social marginal cost must not be allowed to preclude other,
non-pricing measures or to determine a cap on prices for the use of
infrastructure. Higher prices may be needed in order to meet specific
objectives.
Transport and
Environment Reporting Mechanism, the EEA’s tool for evaluating the EU’s
environmental performance in the field of transport
The International
Energy Agency produced a factual
handbook on oil prices and taxes in the midst of the fuel protests,
believing it can be of use to governments and citizens alike. “This pamphlet presents as objectively and
neutrally as possible the main parameters of the current oil situation.” It deals with the evolution of prices from
1971 to 2000, as well as giving a snapshot of oil production costs in various
parts of the world.
Some of the most important concessions granted by European governments
to date
The Commission
has announced it will investigate a number of the concessions offered to hauliers
under suspicion of unfair state aid.
When:
Tuesday,
28 November, 14.00 - 17.20
Where:
European
Parliament, Room - ASP 3 G 3
Organised
by: Heidi Hautala, MEP
and the
European Federation for Transport and Environment
Programme
14.00 –
14.10 Opening by Heidi Hautala
14.10 – 14.55 Fuel taxation and infrastructure pricing: T&E’s
point of view
Malcolm Fergusson IEEP London and T&E board Member
14.55 – 15.40 Fuel prices and transport taxation: International comparisons and perspectives – David Gee
15.40 – 16.25 The fuel price
debates seen from the Commission and the Parliament
Open debate between Commission officials, MEPs, and Member State representatives moderated by Frazer Goodwin.
16.25 – 17.10 Transport infrastructure pricing: Seen from the “High Level Group” and researchers.
17.10 –
17.20 Finishing notes by Frazer Goodwin.