[sustran] poverty alleviation and basic mobility

[Niklas Sieber]

I would like to contribute to the discussion about rising fuel taxes
and their social impacts:

1. If government revenues are lower than the expenditure needed to
maintain the transport infrastructures there are two possibilities:

1.1 The maintenance of the networks is neglected as it is often the
case in many African Countries. Every dollar which is saved on
maintenance causes three dollars of higher user costs. Thus the public
transport user is paying more than he would do if appropriate fuel
taxes would be charged. In the case of goods transport the farmers
receive lower producer prices or the consumer would have to cover the
additional transport costs. A clearly not desirable scenario from
social and economic standpoints.

 1. 2. The second possibility is the transfer of funds from other
government budgets, which implies that the transport sector is
subsidised.In this case both the Mercedes driver as well as the bus
user will be subsidised. Because fuel consumption per pkm in public
transport is much lower than in individual transport the richer will
benefit more than poorer population groups. On top of that the funds
used to subsidise transport have to be saved from other sectors, which
are more likely social sectors than military expenditures. I think
that the subsidies could be more efficiently spent for activities
which contribute directly to poverty alleviation.

2. Another question is the discussion if environmental damages should
be internalised in the transport costs (e.g. rising fuel tax). The
International Railway Union UIC (16 rue Jean Rey, F-75015 Paris)
initiated a study on the external costs in 17 European Countries. In
1994 the total external costs for goods and personal transport by
road, rail, ship (inland) and aeroplane amounted to US$ 340 billion.
If this amount is set in relation to all goods and services produced
in Europe, the environmental costs comprise 4.6% of GDP. The
environmental costs to transport one person with a car over 1000 km
amount to $60, while a bus costs $25 and the railway only $12. Freight
transport produces even larger disparities. 1000 tkm by trucks cost
$72, by rail $9 and by ship only $7. An internalisation of
environmental costs would  be an adequate measure: This means that
every polluter pays for the damages he causes. This can be achieved
with an ecological tax reform including an increase of fuel tax,
emission dependent registration charges for vehicles and a change in
the insurance system. Once the prices are set right, more people would
use environmental friendly means of transport like bicycles, buses,
railways or ships. The demand for low emission vehicles would increase
and car industries would react by producing these products, which have
already been developed and tested, but cannot be sold.

If the perspective of global warming is regarded, the Industrialised
Countries are producing most of the CO2 emissions, while the
Developing World will suffer most from climatic changes or sea level
rise (e.g. Bangladesh). Because of equity reasons an internalisation
of environmental cost in the North would be certainly desirable. But
what about the Developing World? Can African Farmers still compete on
the World Markets if transport prices rise? Wouldn't China be starting
in the right direction by internalising environmental costs?
Definitively I think that the North should start before the South can
follow.
_____________
Niklas Sieber
International Forum for Rural Transport and Development
150 Southampton Row
London WC1 B5AL, UK
Tel.: +44 171/ 278 3682, Fax: +44 171/ 278 6880
e-mail: ifrtd at gn.apc.org
Webpage: http://www.gn.apc.org/ifrtd