Environmental rail charges in Europe: a review

ABSTRACT

European legislation implies the use of marginal social cost pricing in rail access charges levied on rail operators. Thus, they may include specific environmental charges to internalise the impacts of rail transport. However, when applying these principles in practice, several difficulties call for second-best settings adapted to the particularities of the rail market. In this context, few European railway administrations are already implementing rail access charges with an environmental dimension. This paper reviews the literature on the issue and assesses the current European experience in noise and air pollution rail charges. For this purpose, an analytical framework is built on the definition of four basic dimensions: charging approach, allocation of abatement efforts, degree of differentiation and intermodal approach. The qualitative examination of the existing systems suggests that the level of environmental surcharges can be generally increased given the low substitutability between rail and road and that the range of abatement possibilities should be enlarged by further differentiating charges. It is also found that the pricing scope should be adapted to achieve particular cost-efficient allocations of abatement efforts among rail operators and upstream agents. Finally, further research requirements for a quantitative assessment are defined.

KEYWORDS:

• Rail charges
• environmental pricing
• internalisation
• noise
• air pollution
• environmental impact abatement

Disclosure statement

No potential conflict of interest was reported by the authors.

ORCID

Aleix Pons-Rigat http://orcid.org/0000-0002-8176-9377

Notes

1 For a further discussion about the short-run marginal cost pricing principle applied to railways, see, for example, Nash (2005).

2 See, for instance, Bickel, Friedrich, Link, Stewart, and Nash (2006), INFRAS and IWW (2000), Nunes and Travisi (2007), Ricardo-AEA, DIW econ, and CAU (2014).

3 Marginal abatement costs increase with the level of abatement. This intuitive idea is supported by both theoretical (e.g. Siebert, 2004) and empirical (e.g. McKinsey & Company, 2009) approaches. On the other hand, marginal environmental costs savings can be deemed constant with the level of abatement for air pollution impacts, whereas in the case of noise this assumption would be less reasonable due to the logarithmic character of its effects on people.

4 The total marginal abatement cost curve envelopes the marginal abatement cost curves of each particular measure (the minimum among all them). Thus, a wider range of abatement possibilities will generally lead to a lower total marginal abatement cost.

5 The optimal combination of both will be reached when technology abatement is performed up to the point where marginal costs of environmental damages equate marginal abatement costs and final users trade-off their marginal benefit (consumer surplus) with the marginal social cost of travel given the optimal technology abatement (Proost & Van Dender, 2012). If the emission charge is levied on the producer, the optimal output both in terms of abatement technology and consumption will be reached as the producer will transfer the increased price downstream (Proost, 2011).

6 A bottom-up approach is recommended for pricing purposes because it allows a differentiation of marginal environmental costs (CE Delft et al., 2008).

7 The sound pressure level (SPL) of noise is measured in decibels (dB) in the following way:

where p is the sound pressure and is the reference sound pressure .

8 For an updated and comprehensive review on the issue see Requate (2005) and for other insights see, for example, Meunier and Quinet (2009, 2012).

9 Rail and air competition is generally limited to high speed rail and it is not included in this study. For different approaches on this issue see, for example, (Albalate, Bel, & Fageda, 2015; Sánchez-Borràs, Nash, Abrantes, & López-Pita, 2010).

10 According to the Implementing Regulation, a “silent train” should be composed of at least 90% of wagons complying with technical specifications for interoperability noise norms.

11 Dust and other direct emissions can be deemed negligible, with the possible exception of underground stations.

12 The fuel consumption is closely linked to CO₂ and PM_2.5 emissions, but NO_x and SO_x are more dependent on the fuel type. Thus, fuel taxes should at least be differentiated according to the fuel type to provide a more adequate incentive for the abatement of all air pollution emissions (see, e.g. TML, TNO, CE Delft, & TRT, 2012).

Additional information

Funding

This work was supported by Secretaría de Estado de Investigación, Desarrollo e Innovación. Convocatoria de ayudas de Proyectos de Investigación.