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Urban Road Transportation Externalities: Costs and Choice of Policy Instruments

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  • Govinda R. Timilsina
  • Hari B. Dulal
Abstract
Urban transportation externalities are a key development challenge. Based on the existing literature, the authors illustrate the magnitudes of various external costs, review response policies, and measure and discuss their selection, particularly focusing on the context of developing countries. They find that regulatory policy instruments aimed at reducing local air pollution have been introduced in most countries in the world. On the other hand, fiscal policy instruments aimed at reducing congestion or greenhouse gas emissions are limited mainly to industrialized economies. Although traditional fiscal instruments, such as fuel taxes and subsidies, are normally introduced for other purposes, they can also help to reduce externalities. Land-use or urban planning, and infrastructure investment, could also contribute to reducing externalities; but they are expensive and play a small role in already developed megacities. The main factors that influence the choice of policy instruments include economic efficiency, equity, country or city specific priority, and institutional capacity for implementation. Multiple policy options need to be used simultaneously to reduce effectively the different externalities arising from urban road transportation because most policy options are not mutually exclusive. Copyright 2011, Oxford University Press.

Suggested Citation

  • Govinda R. Timilsina & Hari B. Dulal, 2011. "Urban Road Transportation Externalities: Costs and Choice of Policy Instruments," The World Bank Research Observer, World Bank, vol. 26(1), pages 162-191, February.
    • Handle: RePEc:oup:wbrobs:v:26:y:2011:i:1:p:162-191
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    File URL: http://hdl.handle.net/10.1093/wbro/lkq005
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    Cited by:

    1. Yasser Ammar AL-Rawi & Mohammed Harith Imlus & Yusri Yusup & Sofri Bin Yahya, 2018. "The Optimal Progressive Tax Policy to Reduced Vehicles Externalities," Journal of Asian Scientific Research, Asian Economic and Social Society, vol. 8(8), pages 265-276, August.
    2. Faryal Ali & Zawar Hussain Khan & Khurram Shehzad Khattak & Thomas Aaron Gulliver & Akhtar Nawaz Khan, 2022. "A Microscopic Heterogeneous Traffic Flow Model Considering Distance Headway," Mathematics, MDPI, vol. 11(1), pages 1-20, December.
    3. Keeling, David J., 2013. "Transport research challenges in Latin America," Journal of Transport Geography, Elsevier, vol. 29(C), pages 103-104.
    4. Claudia N. Berg & Uwe Deichmann & Yishen Liu & Harris Selod, 2017. "Transport Policies and Development," Journal of Development Studies, Taylor & Francis Journals, vol. 53(4), pages 465-480, April.
    5. Barbieri, Nicolò, 2015. "Investigating the impacts of technological position and European environmental regulation on green automotive patent activity," Ecological Economics, Elsevier, vol. 117(C), pages 140-152.
    6. Brown, Zachary S. & Oueslati, Walid & Silva, Jérôme, 2016. "Links between urban structure and life satisfaction in a cross-section of OECD metro areas," Ecological Economics, Elsevier, vol. 129(C), pages 112-121.
    7. Tesemma, Tewodros, 2023. "Encouraging adoption of fuel-efficient vehicles – A policy reform evaluation from Ethiopia," Working Papers in Economics 838, University of Gothenburg, Department of Economics.
    8. Maryam Feyzollahi & Pierre-Olivier Pineau & Nima Rafizadeh, 2024. "Drivers of Driving: A Review," Sustainability, MDPI, vol. 16(6), pages 1-41, March.

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