Around 30% of the world’s greenhouse gas emissions come from the transport sector, mainly from road transport which registers 20%. The rest comes from aviation, marine transport and railways.

Minister Eamon Ryan, announcing an expanded programme of investment in routes for walking and cycling last Monday, stressed once again his desire to see less reliance on car commuting. He fears that the end of the pandemic, whenever it comes, will see the return of congestion.

There is some evidence that people are still wary of public transport, used car prices have risen sharply and car reliance could rise post the pandemic.

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Urban congestion

Urban congestion and carbon emissions are both negative externalities imposed by transport users and it is true that car commuting is a big contributor in both cases. But the picture is complicated and the transport sector needs to be seen in the round.

Some elements are easier to de-carbonise than others for example and least-cost solutions must always be sought.

There are four main externalities imposed by road users. These are (i) carbon emissions, (ii) congestion, (iii) poor air quality due to non-carbon emissions, and (iv) pressure on scarce urban land through subsidised parking provision for stationary vehicles.

For cars, light vans and buses, viable electric vehicles are on the way

Auto fuels are taxed heavily in Europe, although some non-European countries charge far too little. To an extent, the emissions externality is being addressed in Europe courtesy of these high taxes.

It is also stated public policy to shift towards electrified vehicles, while electricity generation is being switched towards renewables. For heavier trucks, it may not be possible to shift to battery-powered vehicles. The batteries are too heavy and payload would suffer.

But for cars, light vans and buses, viable electric vehicles are on the way and the fleet could look very different inside a decade. Greenhouse gas emissions are gradually being phased out under existing policies.

Air quality

Congestion is a very different problem and needs different policy instruments. Outside urban areas, it is not much of a problem at all.

If rural dwellers end up driving electric cars powered mainly with low-carbon electricity, there is little reason to discourage them on this score. The same is true in the case of the third externality, the worsening of air quality due to the combustion of fuels, especially diesel, in vehicles. This, according to the medical experts, is a more acute issue in built-up areas.

Finally, space to park stationary vehicles is plentiful outside cities and towns, but must be provided in urban areas where there are competing higher value uses for the land.

Too many employers provide free workplace parking

An extraordinary amount of road space, not charged for, is taken up in city suburbs to accommodate stationary vehicles. The average private car in European cities is in motion for no more than 15 or 20 hours out of the 168 in a week.

Roadside space for these stationary vehicles is free or seriously under-priced. Too many employers provide free workplace parking, discouraging the use of walking, cycling and public transport.

The carbon emissions problem, except for heavy trucks, is being taken care of through high fuel taxes and electrification, but congestion cannot be tackled, nor can the air quality issue, without some subtler policy instrument.

The best option would be direct charging for the use of urban roads at peak traffic times and a surcharge for legacy vehicles which worsen air quality could be grafted on.

Newer cars are ‘connected’ and systems of congestion charging will become possible which do not require costly and inefficient cordon arrangements as have been adopted in London and other cities.

Charmed life

Air travel and marine transport have led something of a charmed life. In almost all countries, there are no excise duties on the fossil fuels used in these transport modes, courtesy of ancient international treaties dating back to the Second World War.

Excise at the carbon tax rate would add around 5% or 6% to the price of airline tickets and the European Commission has plans to move in this direction.

Marine diesel and bunker fuels also enjoy a tax holiday. The economist John FitzGerald urged the imposition of excise on these fuels in an article in The Irish Times last week and Minister Ryan will no doubt support the Commission’s proposals.

He should also be aware that airline tickets do not attract VAT, actually a bigger tax concession than the absence of fuel excise.

For ships, it may be possible to rely on on-board nuclear power units, already employed on submarines and ice-breakers.

For aircraft, there is little likelihood of a move to electric propulsion with any of the feasible technologies – the batteries would be just too heavy.

But the imposition of normal taxes on aviation would cut demand, it has been estimated, by as much as a quarter, the best that can be done for now.