sactra

Topics

• Mobility

Abstract

The SACTRA report mainly addresses the questions: (1) Do transport improvements lead to increased economic activity? (2) Is it possible to decouple traffic growth from economy growth, in order to obtain the positive benefits of greater wealth, while reducing some of the negative effects of congestions and environmental impacts? (3) Are economic impacts fully captured in the procedures for estimating benefits and costs currently used by the Department of Environment, Transport and Regions? A large part of the project has been concerned with the economic impact of transport initiatives in the context where prices are not, in general, set equal to full internal and external marginal costs. If they were, there would in principle be a positive impact on the economic effectiveness of all other transport interventions. This is because the volume and pattern of traffic would be altered to different, more economically efficient levels: this would provide the context, and in some cases the funds, to enable a new, better-judged, balance of infrastructure investment for the various models and more efficient management of the systems we already have. It is because such optimal pricing frequently does not apply, that assessment of the price conditions is the critical step which can allow appraisal to identify the conditions in which improvements may assist the promotion of economic growth. And the same assessment also enables identification of conditions where traffic may be reduced without harming the economy (and, indeed, potentially benefiting it) if done by pricing mechanisms which restore the relationship between price and marginal cost, or by well-targeted non-price instruments. It is concluded that there is scope for carefully judged policies which help to decouple the rate of traffic growth from the rate of economic growth, thereby reducing the environmental and congestion costs of traffic and also to some extent assisting in delivering the benefits of economic growth. Such policies include pricing, management and investment initiatives, in a balance which will vary according to the specific circumstances of each intervention. Appraising each case requires improved assessment of the conventional transport and environmental impacts, together with a more systematic consideration of the impacts on the wider economy.

Reference to the original publication

pdf, http://www.dft.gov.uk/stellent/groups/dft_econappr/documents/pdf/dft_econappr_pdf_022512.pdf

Further information

sactrareport

final report