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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," World Bank Research Observer, World Bank Group, 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. Musharrat Azam & Jamal Othman & Rawshan Ara Begum & Sharifah Mastura Syed Abdullah & Nor Ghani Md. Nor, 2016. "Energy consumption and emission projection for the road transport sector in Malaysia: an application of the LEAP model," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 18(4), pages 1027-1047, August.
    2. 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.
    3. 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.
    4. 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.

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