Statement by Torild Skogsholm, State secretary,
The Ministry of Transport and Communications,
Norway

The use of effective measures to reduce the adverse effects of transport on the environment and on public health.

Held at the ECE Regional Conference on Transport and Environment,
Vienna, 12 - 14 November 1997

It is well known that transport activities cause harmful environmental effects, - as well as undoubted benefits to the individual. Public action is called for to cope with the problems caused by transport, and in most countries transport activities are met by public interference.

The adverse effects of transport are numerous and diversified. Which measure to chose will depend on the issue in question, and a variety of measures has to be applied in order to deal with the problems, - both economic, technological and legal. However - economic measures will in many cases prove to be the most cost effective to combat the harmful effects of transport. Taxes and duties fixed according to the social costs of transport is a way of informing the agents in the transport markets about these costs. To ensure cost effectiveness at a general level, it is of course of great importance that all transport modes are treated likewise, and that all sources of the same negative effect - for instance greenhouse gas emissions - are treated similarly across all economic sectors.

In Norway, taxes and duties have long played an important role as instruments in environmental policies. One example is the tax on CO2-emissions. The CO2-tax was introduced in 1991 and is at present imposed on about 60 % of all CO2- sources. Analysis of the effects of the CO2-tax suggests that the tax do reduce CO2-emission growth rates. Furthermore, the duties on petrol and diesel are quite high, due to the high social costs of road transport. A special lead tax has led to the phasing out of leaded fuel. A sulphur tax on mineral oils has also proved to be effective.

The main advantage of economic instruments is that the decision about what actions to take is left to the individual consumer and producer. Most likely, the individual has the best knowledge about the benefits created by transport, and about the costs and disadvantages of changing to a different transport mode; to adopt new technology, to reduce travel at peak hours or to reduce travel all together.

Second, - taxes and duties on negative environmental effects will make adapting new - and environmentally sound - technologies more profitable. Research and development on new technologies will be stimulated as well.

Last - but not least - taxes and duties on the use of environmental goods createpublic revenue and allows other - and inefficient - taxes to be lowered.

In Norway, a "Green Tax Commission" has recently evaluated the present tax system and made suggestions on how it may be changed in order to increase employment and reduce the use of natural resources and harmful emissions. The commission makes several significant suggestions regarding the taxation of transport.

The proposals are supported by several studies suggesting that a lowering of labour taxes, combined with an increase in environmental taxes, indeed does improve the workings of the economy, by reducing emissions and increasing employment and economic growth.

The proposals put forward by the Norwegian green tax commission, as well as several other commissions, are at present being closely considered by the government. In particular, road pricing is given high priority.

Certain kinds of economic instruments are, however, easier accepted in one country when harmonized with neighbouring countries. A typical example is fuel taxes. I am therefore encouraged by the fact that the international communities are now discussing the option of internalising the social costs of transport by introducing economic instruments. Let me highlight a couple of examples of great strategic importance:

First is the European Commissions Green Paper on "Fair and Efficient Pricing". Norway has, together with the other EFTA Member States supported the Commissions proposals, and encouraged the EU, in co-operation with other European States, to take further steps in order to facilitate efficient pricing of transport.

Second is the fact that Ministers of Transport both at the Berlin Council of Ministers of 1997 and in their 1997 Helsinki Declaration accepted the approach to internalising the external costs set out in the report of the ECMT Task Force on social costs.

Third, of course, is the adoption of the documents at our tables today.

Thank you for your attention.