September 24, 2007

For the sake of the planet ... don't take the train

With green politics high on the agenda of all three of the main parties the concept that the polluter should pay has found quite a voice recently. This is entirely sensible, by internalising the external costs by using a Pigou tax on pollution we can let the markets sort out the optimal amount in the most efficient way that we have yet discovered, as we do with every other resource.

Car drivers and bike rider pay the full cost of their carbon, and then some, through fuel duty. Last year's increases in Air Passenger Duty mean that aviation is pretty close (with some caveats since this is a much cruder way internatising carbon than taxing it directly) to paying its way as well. Walking and cycling the only carbon produced is through breathing so I would hope that even the deepest green isn't going to try and stop people breathing, in which case they should lead by example. If we take the polluter pays principle seriously then the principal means of private transport do. No need for road pricing, no need for extra taxes on big cars, no need to force companies to charge for car parking when they do not want to.

So for private transport everybody pays roughly the amount that they pollute. Then so far as transport is concerned we are done then? Not quite.

In addition to the private transport networks there is also public transport. By choosing to take public transport are you paying for the full cost of this choice? No. The railways do pay fuel duty but unlike motorists they can use red diesel that is only taxed at 7.69p. This is a little lower than is needed to pay for climate change according to the Stern numbers, the numbers preferred by the green lobby that is always trying to get us out of cars and onto trains. In addition to this both buses and trains are heavily subsidised by central government. Public transport users are not even paying the full cost of transporting themselves to their destinations, let alone paying for the externalities that are also associated with them. These external costs are still external and being footed by everybody else.

Only when the principle of the polluter paying extends to public transport will we truly be done with the climate change effects of transport. So with green politics so high up the agenda at the moment when should we expect this loophole to be closed?


The political and media elites of the Westminster bubble all rely on public transport, working in London they are in one of the few places in the country where the utility of public transport is actually greater than private. To close this loophole they would be lobbying for an increase on the costs to themselves. This isn't going to happen. It is much easier and cheaper for them to plicate their consciences about climate change by taking it out on those that use private transport, even though it is for private transport that the external costs have been fully taken into account.


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