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Response to DETR consultation
Developing an Integrated Transport Policy
Developing an Integrated Transport Policy
Response to DETR by Professor M J OCarroll, 14.11.97
1. Integration, energy and water
In his Foreword to the August issue of Energy and Environmental Management, the Deputy Prime Minister emphasised the need for strategic thinking on environmental issues, saying "The environment and influences on it must be considered as a whole". Integrated transport policy presents a broad enough scenario in itself, but it must not be isolated from other environmental policy areas such as energy and water which have transport networks. It is important to interact with the DTI and its developing energy policy.
In particular there is a conflict for bulk energy transport between gas pipelines and electricity transmission lines. Financial distortions in the artificial electricity market, arising from the 1989 Electricity Act and exacerbated by weak regulation, provide false incentives to locate new power stations (in the "dash for gas") uneconomically in the far north, where there is already more than a 100% surplus capacity (i.e. double what is needed).
Such mislocation, remote from the net importing areas in the south and south west, fosters massive energy waste both in generation and in transmission. The direct financial value of this waste is of the order of £7 billion per year (wholesale) or £20 billion per year (retail), not to mention capital, operating and wider environmental costs. I gave a more complete analysis of costs in my response to the House of Commons adjournment debate of 24.7.97.
Much of this waste would be recoverable from distributed local Combined Heat and Power (CHP) systems. John Battles Foreword to the Energy Report Volume 1 (1997) gives the government policy target of 10GWe from CHP by 2010, increased from the previous target of 5GWe by 2000. The transport implications of this policy are for increased distribution of gas on the existing gas grid and a brake on excessive duplication of the electricity grid. The brake should be applied by withholding both Section 37 consents for excessive transmission lines and Section 36 consents on new power station proposals which are mislocated; these are matters for Secretary of State for Trade and Industry.
In January 1993 I submitted evidence to the Trade and Industry Select Committee about the coal crisis, recommending that energy transmission be co-ordinated and that a national network authority rationalise transport of gas, water, electricity and telecommunications with road and rail. There could be an argument for a north-south integrated transport spine of underground pipelines and cables following rail and motorway routes.
2. Cost reflectivity
Just as utility regulation is moving, albeit too slowly, towards cost reflectivity, so it is important for transport. When we buy goods, particularly when they and their components have travelled far, we rarely pay the hidden transport costs, particularly the costs of environmental damage. A central EU principle is that costs of environmental damage should be internalised into the costs and pricing of developments and goods.
For example, the cost of environmental damage of road traffic and infrastructure should bear upon the price of transport and of goods transported. The environmental cost of energy waste in power stations and in transmission should bear upon the price of electricity produced. Improved cost-reflectivity would tend to give incentives for more distributed local production and reduced bulk transport, without damaging exports. It would deter dislocation of power stations from demand in favour of better use of gas pipelines and CHP.
Would cost-reflectivity add to the explicit overall cost of transport within the UK? It may simply reduce unnecessary transport. If it did add to explicit costs, it would be a proper recognition of previously hidden environmental costs, and would be beneficial to the country as a whole. In the case of electricity it should strongly reduce overall costs by reducing the very large-scale wastage.
Transport, like energy, is far too cheap! That is why both are used so wastefully. Either tolls or taxation have the potential to improve cost-reflectivity, following the polluter-pays principle, by charging utilities, developers and transporters for the environmental damage they cause. Social exclusion and access may be tackled by concession policies. VAT on fuel was good, but the last governments penny-pinching on concessions spoiled it.
3. Cycling, walking and town centres
Cycling has the potential to improve peoples health and quality of life, with many indirect economic benefits. At present cycling has the reverse effects due to traffic hazards. Radical changes are needed, to create more traffic free cycleways and to convert more roads from motor traffic to cycling. Consequent disruption to and deterrence of road traffic would on balance be beneficial and would further the governments aims. If it adds to road transport prices, so much the better, for they need to be more cost-reflective.
There is an opportunity to re-vitalise town centres by protecting them from road traffic. Just as in airports and some pedestrianised areas such as the Metro Centre, there can be interlocking fingers for connecting and delivery traffic. But those examples are on a small scale. Town centres could have much larger pedestrianised areas. There must be appropriate local infrastructure such as baggage storage, internal transport like electric vehicles and moving pavements, security and space for relaxation - these things are not new even to the 1990s, some will develop spontaneously in stable schemes.
4. Responses to questions asked
Qu1. The aims in paragraph 10 are good, particularly with environmental objectives at the head of the list. They could be improved by including
the enhancement of quality of life as a guiding principle
energy in the third aim (promoting greater efficiency)
reducing unnecessary transport and promoting alternatives such as telematics.
Qu3. Better regulation and improved cost-reflectivity could incentivise useful changes.
Qu4. Restrain motor traffic by cost-reflective charging, for fuel and road and zone use and taxing motor advertising. This will stimulate local economy and will not damage exports.
Qu5, 8, 12, 14, 19, 22. See above notes section 2 on cost-reflectivity.
Qu13. See above notes section 1 on integration, energy and water.
Qu17. Yes, definitely, no matter how the receipts are used.
Qu24. By restraining damaging extravagances and using concessions.
Qu27. See above notes section 1 on integration, energy and water.
M J OCarroll