POLICY CONCLUSIONS FROM THE REVENUE PROJECT

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POLICY CONCLUSIONS FROM THE REVENUE PROJECT
Final Conference Revenue Use from Transport
Pricing Brussels 29- 30 November
CARLO SESSA (ISIS)
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OBJECTIVES
Identify the most effective options for
utilising the revenues arising from transport
pricing
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METHOD
Distillate the policy conclusions and
recommendations from consolidating and
summarising the findings of work-packages 1-5
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OUTPUT
Concrete and practical guidelines on the topic,
to be disseminated to policy makers and
stakeholders (Deliverable 6)
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PLANNING OF DELIVERABLE 6
0. Executive Summary
1. Introduction what are the research questions
raised in D1
2. Methodological framework for the assessment of
alternative uses of revenue regulation schemes
using D2
3. Case study results for interurban transport
using Deliverable 4
4. Regulation schemes in urban transport using
Deliverable 5
5. Overview of current and potential practice in
pricing and revenue use in Europe and
confrontation with the results of the case
studies using Deliverable 3
 
6. Policy conclusions and recommendations
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KEY ISSUES

• Cost Benefit Analysis of the pricing schemes
• (welfare impacts)
• Clear understanding of the revenue flows
• (current and potential changes)
• Interaction between 1 and 2
• Acceptability of the pricing and revenue
• recycling strategies

 
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WELFARE IMPACTS Key Questions

• Are the welfare impacts really significant ?
• To what extent the results are constrained
• by the methodology, assumptions, input data
• used ?
• To what extent the case study findings can
• be generalised ?

 
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REVENUE STRATEGIES Key Questions

• Are the case studies showing clear options
• for revenue recycling ?
• Is it clear who should pay to whom for what
• (e.g. implications for different levels of
• government, taxes and subsidies) ?
• To what extent the different revenue
• recycling strategies influence the welfare
• impact ?

 
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ACCEPTABILITY Key Questions

• What are the lessons learned about the
• acceptability of the pricing schemes ?
• Who are the actors involved (stakeholders,
• citizens) ?
• Is a clear understanding of the consequence of
• transport pricing and revenue recycling
• strategies for the people welfare enough to
• enhance acceptability ?

 
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COMPREHENSIVE FRAMEWORKTO BENCHMARK REVENUE
RECYCLING STRATEGIES
Why we need a comprehensive framework to
illustrate the case study findings ?
Example of Zurich airport case study
We do not need to invent a new conceptual framewor
k, we already have it ! Transport
accounting
 
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USING A REVENUE ALLOCATION METADATA FRAMEWORK TO
BENCHMARK REVENUE RECYCLING STRATEGIES
REVENUE CASE STUDIES
Common framework to benchmark revenue recycling st
rategies
Analysis of pricing and revenue recycling
(regulation schemes)
NAT NATIONAL TRANSPORT ACCOUNTING METADATA
INTERNALISATION
Environmental themes/indicators
INTEGRATION OF EXTERNALITIES ACCOUNTS (NAMEA
approach) - NATEA METADATA -
VALUATION OF EXTERNALITIES
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WHY TO USE NATIONAL ACCOUNTING CONCEPTS ?

• The System of National Accounts (SNA) records
  economic flows and stocks of a country, allowing
• to answer systematically to the question
• WHO DOES WHAT BY WHAT MEANS FOR
  WHAT PURPOSE WITH WHOM
• IN EXCHANGE FOR WHAT
  WITH WHAT CHANGES IN STOCK ?

The SNA does not attempt to determine the utility
of the flows and stocks which come within
its scope (neutrality in relation to the welfare
impacts of the regulation schemes investigated in
the REVENUE case studies)
The SNA can be adapted to improve the
representation of economic flows and stocks
related to all transport activities (recording
commercial and own-account transport in Transport
Satellite Accounts)
The SNA doesnt include externalities within its
scope, but extended accounts (NAMEA)
include external impacts denominated in physical
units
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OVERVIEW OF NATIONAL ACCOUNTING METADATA
SEQUENCE OF ACCOUNTS production accounts,
distribution and use of income, accumulation
accounts
INSTITUTIONAL SECTORS non-financial
corporations, financial corporations government
units, non-profit institutions serving
households, households

• SYSTEM OF NATIONAL ACCOUNTS (SNA) PRODUCTION
  BOUNDARY
• - Includes market output, non-market output,
  own-account output for fixed capital formation
• of producers
• Includes households productions of goods for
  own final consumption, dwelling services,
• domestic services produced by employed staff
• - Does not include do-it-yourselves households
  activities (including car driving)

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OVERVIEW OF NATIONAL ACCOUNTING METADATA
NEEDS FOR ADAPTATIONS
Transport activities undertaken by households are
not included in the production boundary
The production of transport for own use within an
enterprises is an ancillary activity that is not
separately identified and recorded. Therefore,
costs of in-house transport fuels and vehicle
costs, drivers wages etc are embedded in the
accounts of various industries other than the
transport service sector
Part of the operation of the transport system is
undertaken by non-market producers
i.e. government units in the form of collective
services, such as cleaning, maintenance
and repair of public roads, bridge, tunnels
provision of street lighting. The output of
non-market transport is included in the System,
but being treated as collective service provided
free to households and enterprise, it is
difficult to separate its contribution to
intermediate and final consumption.
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OVERVIEW OF NATIONAL ACCOUNTING METADATA Full
accounting of transport activities
NATS INNOVATIONS
To expand the production boundary of the System
including the usage of private cars for work
trips, as additional output produced for own
final consumption by households
To estimate the amount of in-house transport
undertaken by enterprises as ancillary activity
in the various sectors of the economy, and to
form a separate virtual in-house transport
sector, extracting the ancillary transport
related costs from all other sectors of the
economy
To show transport non-market services separately
from other non-market goods and services provided
by government units and NIPSHs, and to estimate
the consumption of transport collective goods and
services (e.g. the use of road infrastructure) by
households and by enterprises
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OVERVIEW OF NATIONAL ACCOUNTING METADATA
Transport accounting items
PRODUCTION ACCOUNT
Market output of the transport services rendered
to third parties - Land transport road, rail,
pipelines - Water transport sea, inland
waterways - Air transport - Auxiliary transport
services
Non-market transport activities typically
include - Provision of road infrastructure by
the State (national roads), provinces
(provincial roads and local authorities (urban
road) their maintenance and cleaning
activities - Provision of port infrastructure,
lighthouses their operation and maintenance -
Provision of inland channel and river port
infrastructure their operation and
maintenance activities - Air control services -
Minor services such as provision of street
lighting, shool bus services, etc.
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OVERVIEW OF NATIONAL ACCOUNTING METADATA
Transport accounting items
PRODUCTION ACCOUNT

• Output produced for own final use this category
  shall include as new transport related
• items
• Output for own final consumption of transport of
  members of the household or their
• their goods, undertaken with households own
  vehicles cars, mopeds, bicycles (as a
• result of the extension of the production
  boundary to include this activity and limited
• to work related journeys
• Output for own intermediate consumption of
  transport of goods and persons undertaken
• by any kind of enterprise including market
  and non-market producers as ancillary
• activity

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OVERVIEW OF NATIONAL ACCOUNTING METADATA
Transport accounting items
PRODUCTION ACCOUNT

• Intermediate consumption of transport services
  includes various items for different modes
• Road freight transport services
• Own account road freight transport (ancillary
  activity not recorded separately in the standard
  SNA
• to be estimated and included in a separate
  in-house transport sector of the NAT)
• Road passenger transport services
• Own-account road passenger transport
  (ancillary activity, see above)
• Highways services
• Road infrastructure use costs (these included
  in the government collective services in the
  standard
• SNA the portion of these costs due to
  enterprises use of the road shall be estimated
  and included
• as intermediate consumption in the NAT)
• Rail freight transport services
• Rail passenger transport services
• Rail infrastructure charges
• Urban Public Transport services
• Air passenger services
• Air freight services
• Airport infrastructure charges
• Air control charges
• Sea freight transport

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OVERVIEW OF NATIONAL ACCOUNTING
METADATATransport accounting items
PRODUCTION ACCOUNT

• Consumption of fixed capital assets
• Transport infrastructure
• Transport vehicles (including part of
  households vehicles)

• Value added from
• Transport services to third parties
• Own-account transport of market and non-market
  producers
• Non-market transport activities (mainly labour
  costs)
• Household production for own final
  consumption of private transport services
  normally
• should not include a value added component

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OVERVIEW OF NATIONAL ACCOUNTING METADATA
Transport accounting items
PRIMARY DISTRIBUTION OF INCOME ACCOUNT
Taxes on products VAT on transport services,
fuel taxes, taxes on specific transport services
Other taxes on production taxes levied
periodically on the use of vehicles, ships,
aircraft in the production of transport services
Business and professional licenses, to the extent
that these are applied on transport
operation (e.g. taxi services)
Taxes on pollution caused by transport activities
Subsidies on products subsidies to urban public
transport operators State subsidies to
rail infrastructure undertakings State subsidies
for rail passenger transport Stare subsidies
for rail freight transport subsidies to maritime
transport subsidies to inland water operators.
Subsidies on production State, regional or local
authorities subsidies to the operation
of environmetally friendly vehicles
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OVERVIEW OF NATIONAL ACCOUNTING METADATA
Transport accounting items
SECONDARY DISTRIBUTION OF INCOME ACCOUNT
Other current taxes vehicle taxes with the
extension of the production boundary to include
the use of households vehicles to travel to and
from work, a quota of the vehicles taxes shall
be transferred to taxes on production
Social insurance benefits these are specifically
relevant to transport to the extent that the
social benefits include the coverage of health or
production loss damages caused by transport
accidents
Other current transfers include various items
that can be related to transport
non-life insurance premiums and claims they
allow to internalise part of road accident costs
current transfers within general
government in several countries funds for
financing public transport operation
costs (urban public transport, rail
infrastructure) are constituted at
national or regional level, out of general
taxation, and then transferred for the State or
regional government to the regional or
local authorities in charge of the public
transport services. These transfers are
then used to subsidise public transport
operators Miscellaneous current
transfers in some countries enterprises (e.g.
France) enterprises are required to
finance directly urban transport operators fines
for illegal parking or driving payments
of compensations to internalise damages caused by
accidents or other transport
externalities not covered by non-life insurance
schemes
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OVERVIEW OF NATIONAL ACCOUNTING
METADATATransport accounting items
REDISTRIBUTION OF INCOME IN KIND ACCOUNT
Social transfers in kind A form of social
transfer in kind related to transport is the
provision of transport services usually urban
transport services and rail transport at a
reduced tariff to specific categories of
households or persons (elderly, students etc.).
When these services are provided by transport
operators, usually their loss of revenue is
covered by specific government subsidies, that
should be recorded separately from those covering
the normal operating deficits
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OVERVIEW OF NATIONAL ACCOUNTING
METADATATransport accounting items
USE OF INCOME ACCOUNT

• Household road transport final consumption
  expenditure (COICOP)
• Purchase of motor cars
• Purchase of motor cycles
• Purchase of bicycles
• Spare parts and accessories
• Fuels and lubricants
• Maintenance and repair
• Other services in respect of personal transport
  equipment (include also parking fees)
• Passenger transport by road (bus, coach, taxi
  and hired car, without distrinction between
• urban and interurban transport)
• Insurance connected with transport
• Actual and imputed rentals for the use of
  parking garages in connection with dwellings
• (merged with other actual and imputed rentals
  for housing)

In the NAT system - divide consumption of
passenger road transport services into urban and
interurban - estimate transport to and from work
and move it within the production boundary
part of vehicle purchase to fixed capital
formation part of spare parts, fuels,
maintenance and repair,
parking fees etc. to intermediate consumption
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OVERVIEW OF NATIONAL ACCOUNTING METADATA
Transport accounting items
USE OF INCOME ACCOUNT

• Household rail transport final consumption
  expenditure
• Passenger transport by railway both urban and
  interurban
• In the NAT system this shall be divided into
  urban (to be included in urban public transport)
• and interurban

• Household final consumption expenditure on other
  transport modes
• Passenger transport by air
• Passenger transport by sea and inland waterways
• In the NAT system sea and inland waterways
  passenger trasport shall be separated

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OVERVIEW OF NATIONAL ACCOUNTING
METADATATransport accounting items
USE OF INCOME ACCOUNT
Collective services

• Road maintenance and cleaning
• Ports and lighthouses operation and maintenance
• Inland channels and river ports operation and
  maintenance
• Air control services
• Minor services such as the provision of street
  lighting, school bus services

If detailed data are available, any receipts from
sales of non-market services, such as road
pricing whose importance is now growing, shall be
subtracted from the collective service value
and allocated to final consumption and
intermediate consumption, according to the
amounts of user charges paid by households and
enterprises
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OVERVIEW OF NATIONAL ACCOUNTING METADATA
Transport accounting items
CAPITAL ACCOUNT

• Gross fixed capital formation shall include the
  value of the following fixed assets
• Transport infrastructure highways, national
  and local roads, bridges, tunnels, railway tracks
• railways stations, port infrastructures,
  airport infrastructures, inland waterway
  infrastructures
• Vehicle stocks cars, buses, coaches, trams,
  rail rolling stocks, vessels etc.
• Other transport related equipment and
  structures, such as parking lots in connection
  with
• company premises

• Capital transfers
• Investment grants from national or regional
  funds, to finance the construction of large
  transport
• infrastructures, renovation of vehicle
  fleets, etc.
• Capital endowment of national or local
  transport operators subscribed by State or local
  governments
• State reimbursement of debt services of major
  transport undertakings

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OVERVIEW OF NATIONAL ACCOUNTING METADATA
WHY EXTERNALITIES ARE EXCLUDED ?

• technical difficulties to associate economically
  meaningful values with externalities, but,
• more substantially .

• they are not market transactions into which
  institutional units enter of their own accord,
• there is no mechanism to ensure that the
  positive or negative values attached to
  externalities
• by the various parties involved would be
  mutually consistent, and

• accounts including values for externalities
  could not be interpreted as representing
  equilibrium,
• or economically sustainable, situations. If
  such values were to be replaced by actual
  payments
• the economic behaviour of the units involved
  would change

• therefore, valuation of externalities might be
  included only if a full modelling and scenario
• analysis is undertaken, showing the impacts of
  internalisation of externalities via pricing
• and revenue recycling strategies