Question

Don't you think that higher gas prices resulting from the implementation of a pollution tax on driving cars would encourage more people to start using public transportation or mass transit resulting in the further development and improvement of public transportation system? Wouldn’t the pollution tax also encourage automakers to build better cars that pollute less?

Answer 1

Higher petrol prices combines with pollution would definitely lead to more people to start using public transport or Mass transit system resulting in further development and improvement of public transport system. If we observe the world scenario since Industrial revolution, we would agree that Mother Nature has been exploited to the maximum for personal benefit in which mobilizing of resources or humans have counted the most.178 cities in 156 countries around the world host approximately 180 metro systems, which is still quite less in comparison to complete 193 countries i.e. 37 countries are still left.

There are lot many factors which are available to the overall growth in ridership of public transport/MTS, some of them are as below:

1. Does the country have complete infrastructure embedded in the cities plan for people connectivity.
2. How the economy supports the public transport and the budget is being allocated. In developed nations or big countries effectively spend a good amount on public transport because other elements of economy requiring government attention are largely taken care of.
3. No doubt increasing pollution has made the countries to rethink their sustainable public transport system strategy. Buses are designed to be on electric sources, rather than on Petrol or CNG.
4. To enable the Public transport with renewable sources of energy a lot has to be done across the world. Costly technology could take a count on the growth of usage but a corresponding investment in innovation will make economies more sustainable and growth centric.

On the contrary, car makers are equally spending good time, money & energy in coming-up with pollution free cars. Some of the examples of pollution free cars are battery led, completely electric or solar cars. The very famous ones are the Nissan Leaf and Tesla Model S. Adding to the overall positivity e-taxis is something which is a customer delight, saving them a cost per travel. Some of these projects are government funded so that car producing companies can utilize these funds for creating the infrastructure.

Some of the interesting facts to support the logic :

1. Accidents cost 2% of GDP,€ 200bn per year, € 440 per capita. 65% of road accidents occur in urban areas.
2. Congestion costs 2% of GDP, €200bn per year, € 440 per capita. Cars account for 75% of urban kilometers travelled.
3. Traffic related pollution costs 1.7% of GDP, €160 bn per year, €360 per capita.
4. One bus carries the equivalent of 60 cars, reducing parking requirements.
5. Buses create 11 times less noise than cars and trams 46 times less.

Since the Public transport systems/MTS are owned by government and it’s just the will that can steal the show from high tech technologically advanced privately owned cars which requires good amount of investment in R&D. Even after investing billions of dollars in R&D cost technologically advanced cars would be at a premium price for ultimate customers in comparison to the Public transport system/MTS. If the government provides subsidies to these technological innovations to private sector , it would definitely add to the overall growth of the economy.