Urban transport policies: Energy and Environmental inplications tha Asian experience

Panel: Panel 5: Energy Policy for a Sustainable Environment

Author:
Romeo Pacudan, Institut d'Economie et de Politique de l'Energie (IEPE), France

Abstract

Urban transport is an important source of different types of negative external effects which are classified broadly as congestion external&y and environmental externalities. Mainstream economics recognizes these externalities as a source of market failure and to correct this failure, government intervention is justified. Policy instruments m standard economics are classified as either belonging to the traditional command-and-control or economtc instruments.

Southeast Asian realities are presented as an illustration of success and failure of government intervention in correcting market failure due to externalities. The paper concludes that, as in the case of Singapore, a series of well-designed market instruments directed at different levels, from ownership to the use of private transport, and their reinforcement by the traditional policy of command-and-control could result to an effectrve urban transport externality control. There are, however, necessary preconditions on the effectiveness of these policies such as the existence of efficient urban infrastructure system, effective management of this infrastructure and the existence of an efficient public transport system as an alternative to private transport.

Albeit policy strategies are sufficient to explain the efficacy of externality control, the paper suggests at the end that institutions and culture have played an important role. Policy instruments are only effective with efficient institutions while the existing traditions of the society could influence the choice and the acceptability of policy instruments.