Home › Private: Improving Freight System Performance in Metropolitan Areas: Planning Guide › Section 2 › Pricing, Incentives, and Taxation › Initiative 34: Taxation

Initiative 34: Taxation

Taxation
Description: Initiatives used to raise revenues and foster behavior changes that will lead to public benefits.
Targeted mode: All Traffic, Large Trucks Geographic scope: Nation, City
Type of initiative: Pricing, Incentives and Taxation: Taxation Primary objective: Generate revenue
Expected costs and level of effort to implement: The planning process should involve extensive stakeholder engagement to analyze potential impacts. Care should be taken to ensure that the objectives of the taxation policy are clear, and that the type of taxation chosen will reach the intended decision maker. As with other types of taxation, this initiative may encounter political opposition.
Advantages:

  • Revenue generation
  • Designed as a mix of incentives and penalties:
    • May be more effective than punitive policies
    • May gain society support
 Disadvantages:

  • Low probability for unintended consequences:
    • Tax signals may not reach key decision makers
    • May induce undesirable behavioral changes
  • Difficult to define the optimal charge
Examples:

  • The U.S. Environmental Protection Agency SmartWay program (U.S. Environmental Protection Agency 2013)
  • Stockholm, Sweden electric vehicle program (National Academy of Sciences 2010)
  • Hong Kong Environmental Protection Department (Hong Kong Environmental Protection Departmen, 2011)
Initiative-32(1) image

Source: Nagurney et al. 2002

Initiative-32(2) image

Source: Vittoriano et al. 2011
Related alternatives: 1. Emission Standards; 2. Road Pricing; 3. Relocation of Large Traffic Generators (LTGs)
References: City Ports, 2005; BESTUFS 2007; Hong Kong Environmental Protection Department 2011; Vitoriano Begona et al. 2011; U.S. Environmental Protection Agency 2013

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