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A different approach to funding transport infrastructure

By Kevin Cox - posted Monday, 4 July 2005


Leisure activities
A system could be introduced where people who own cars can obtain a reward depending on how little they use their cars. This will be a voluntary system and will be organised in a privacy friendly manner, but it will distinguish between work-related activities, leisure activities and which roads people travel.

Car usage is monitored automatically and securely through devices onboard cars. The car knows where it has travelled. If someone wants to be considered for a reward they can have a device installed in their car. These devices record where the car travels, but this information is only kept in the car and only aggregate numbers are given to the rewards system.

Long-distance Travel
People who use energy efficient methods for long-distance travel obtain rewards. Each mode of transport is evaluated and a reward calculated depending on whether it is a car, bus, train, plane or other method.

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Ability to use a method of transport
In some situations, such as a large city or in countries or areas with a low driver population, a simple method is to give rewards to people who do not possess a licence to drive a car. This would then give these people access to capital to build methods of transport that suit their needs.

Use of Rewards

Rewards can only be used for capital expenditure on transport or transport-related activities. The rewards are allocated by the owner of the reward. The reward can be given, loaned, sold or given in return for equity in an ongoing business. Rewards are transferable.

Examples of the use of rewards might be the construction of new, or repair of existing, infrastructure such as roads, railways or airports. It might be for the development of information systems to facilitate car pooling. It might be for the development of better ways of using existing infrastructure, such as systems, to facilitate the automatic control of cars while on the roads.

Public road expenditure will be financed, like any other transport expenditure, by borrowing to purchase rewards, by loaning the rewards from people or by giving equity in roads.

Outcomes

It is difficult to predict the outcome and that is the method’s advantage. What we do know is it will influence the behaviour of the population. People will start to look for alternatives so they can get rewards. They will then tend to spend the money on systems that will provide them with rewards while still providing their transport needs.

If there are environmentally undesirable outcomes, they can be overcome by changing the reward structures, reducing the value of rewards for particular infrastructure or eliminating the use of rewards on particular infrastructure systems.

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Even though we do not know what will happen, we can guess. It is almost inevitable that a method for charging for the use of public roads will be introduced. Technologies are available to allow this to happen in a consumer friendly and private manner and it is expected this proposal will accelerate the introduction of such systems. Such systems could be financed from the infrastructure funds. This will, in turn, give alternatives to the way rewards are calculated.

As people get rewards for reducing transport needs, or to use efficient forms of transport, it is likely public transport usage will increase. This makes it more likely that further public transport infrastructure will be built because the usage will increase, making it economic to install new public transport facilities. It also makes it more desirable to live close to where you work and or close to public transport. Again, this reduces transport costs and increases the desirability of behaving in a transport efficient manner.

If people travel by train or by bus between centres of population then they are likely to be given a reward. This increases the desirability of building long-distance efficient infrastructure, such as trains or buses. Capital is given directly to people, so it will mean some will keep the capital and this will help fund their future. The system will result in more economically efficient transport, so there will be an economic dividend that may show itself in a reduction of taxes.

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Article edited by Angela Sassone.
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About the Author

Dr Kevin Cox is an entrepreneur. Previously he has taught Information Systems in Canberra and Hong Kong and worked with computers for various multinationals in Australia, the USA and Indonesia.

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