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The Foreign Trade and Sectoral Impact of Truck Road Pricing for Cross-Border Trade

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  • Karl Steininger

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Abstract

Truck road pricing is on the brink of beingintroduced in a number of European countries.The experience gained from Switzerland, thefirst country worldwide to implement such adistant-dependent pricing scheme, has provedinvaluable. Nevertheless, significant questionsstill remain. The present paper attempts toprovide some clarity by analysing the welfareand sectoral impact resulting from theintroduction of truck road pricing with respectto foreign trade. It is shown that this impactcan be separated into four effects: the pureterms of trade effect, the tax revenue effect,the transit tax revenue effect and the resourcegain effect (resources set free by a reductionin transport activity). A CGE simulation ofeach of these effects identifies theirquantitative implications. Out of the foureffects the pure terms of trade effect turnsout to dominate at both the sectoral andaggregate level. It triggers a trade-inducedwelfare loss. The tax revenue effect, and lessso the transit revenue effect, mitigate thisloss. For a full road transport costinternalization a trade-induced welfare loss isquantified for Austria at 1.3%. Sensitivity ofthis and other aggregate variables is high withrespect to household reaction to transport taxrevenue refunding. The trade-induced welfareloss of variable size as explored in thisarticle counterbalances a fraction of thewelfare gain due to internalization. Copyright Kluwer Academic Publishers 2002

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File URL: http://hdl.handle.net/10.1023/A:1021263213158
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Bibliographic Info

Article provided by European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.

Volume (Year): 23 (2002)
Issue (Month): 2 (October)
Pages: 213-253

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Handle: RePEc:kap:enreec:v:23:y:2002:i:2:p:213-253

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Web page: http://www.springerlink.com/link.asp?id=100263

Related research

Keywords: environmental policy; foreign trade; heavy goods vehicle tax; transport cost internalization; transport policy;

References

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  1. K. Farmer & K.W. Steininger, 1999. "Reducing CO2-Emissions Under Fiscal Retrenchment: A Multi-Cohort CGE-Model for Austria," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 13(3), pages 309-340, April.
  2. Reinert, Kenneth A. & Roland-Holst, David W., 1992. "Armington elasticities for United States manufacturing sectors," Journal of Policy Modeling, Elsevier, vol. 14(5), pages 631-639, October.
  3. Helpman, Elhanan, 1984. "A Simple Theory of International Trade with Multinational Corporations," Journal of Political Economy, University of Chicago Press, vol. 92(3), pages 451-71, June.
  4. Birgit Friedl & Karl Steininger, 2002. "Environmentally Sustainable Transport: Definition and Long-Term Economic Impacts for Austria," Empirica, Springer, vol. 29(2), pages 163-180, June.
  5. Karl W. Steininger, 2002. "Transport, Access and Economic Growth," World Economics, World Economics, Economic & Financial Publishing, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 3(2), pages 75-91, April.
  6. Ignatius J. Horstmann & James R. Markusen, 1990. "Endogenous Market Structures in International Trade," NBER Working Papers 3283, National Bureau of Economic Research, Inc.
  7. Markusen, James R., 1984. "Multinationals, multi-plant economies, and the gains from trade," Journal of International Economics, Elsevier, vol. 16(3-4), pages 205-226, May.
  8. S. Lael Brainard, 1993. "A Simple Theory of Multinational Corporations and Trade with a Trade-Off Between Proximity and Concentration," NBER Working Papers 4269, National Bureau of Economic Research, Inc.
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Cited by:
  1. Birgit Friedl & Karl Steininger, 2002. "Environmentally Sustainable Transport: Definition and Long-Term Economic Impacts for Austria," Empirica, Springer, vol. 29(2), pages 163-180, June.
  2. Karl Steininger & Christoph Schmid & Alexandra Tobin, 2012. "Regional and environmental impacts of expanding the heavy duty vehicle charge to the secondary road network in Austria," Empirica, Springer, vol. 39(2), pages 261-278, May.

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