PietRietveld

Barriers to innovation towards sustainable transport: 

Barriers to innovation towards sustainable transport Jeroen van den Bergh, Eveline van Leeuwen, Frans Oosterhuis, Piet Rietveld, Erik Verhoef Vrije Universiteit Amsterdam

What is innovation:: 

What is innovation: Qualitative change in technology ways of organisation, within firm, government unit between firms and government units: new combinations Innovation versus imitation new in firm new in country new in world We adopt broad perspectives according to both dimensions

Slide3: 

Time Development of net benefits BAU Innovation; successful 0 NB0 Innovation; failed

Barriers/enablers  -examples : 

Barriers/enablers -examples Technological features need for /availability of complementary infrastructures and technologies for example: biofuels easy to implement Competencies quality of civil servants at various levels, competencies in private sector Administrative/legal presence of supportive formal institutions, national, EU, …. Political and process oriented factors aims of politicians, incentive structures for civil servants, relative strength of actors Socio-cultural, psychological perceived risks and interests of various parties affected: firms, consumers, incumbent suppliers, distribution issues Economic net benefits for actors in the market, degree of uncertainty need for subsidies?

Barriers to innovation in sustainable transport: 

Barriers to innovation in sustainable transport Part of benefits arise as decreases in externalities Hence: potential lack of interest from private sector Important role for public sector getting the prices right setting standards (Kyoto protocol) or direct involvement in innovation trajectories Political/social acceptability themes

How to measure success? (1): 

How to measure success? (1) Plan was implemented according to plan: degrees Plan objectives have been realised: whose objectives? Example: HST may be a commercial success, but does not necessarily contribute to sustainability High rate of adoption in target group After implementation, plan was judged positively by important group of users Temporal dimension: Success evaluation after how many years: 1 year, 5 years, 15 years Social cost-benefit analysis take into account existing market distortions

How to measure success? (2): 

How to measure success? (2) Were subsidies needed/justified? Unintended side effects (positive/negative) paid parking may increase number of car movements Conclusions: Success is not a 0-1 measure no unambiguous indicator: an innovation may receive good scores according to most items above and nevertheless come out negatively in a CBA.

Fallacies in ex-post innovation adoption studies :: 

Fallacies in ex-post innovation adoption studies : Biases towards success cases actors interests Success has many fathers lack of information on failures Wisdom of hindsight used in explaining success or failure; certain factors appeared to function as barriers, but could this be anticipated from the beginning? Negative effects are overlooked for example: taxpayers interests

Dutch case studies of past innovation initiatives: 

Dutch case studies of past innovation initiatives Case study type Success/Failure Catalytic converter technology S Alternating HOV lane infrastructure F Transferium (advanced P&R) infrastructure ? Public transport information system information/ICT S Introduction of road pricing pricing/ICT F Public transport railway pass pricing ? Autodating new service concept ? Train taxi new service concept ?

Catalytic converter subsidy (1) : 

Catalytic converter subsidy (1) Aim: reduction of NOx emissions, also lead emissions EU policies were slow due to interest conflicts between European countries related to protection of national car manufacturers February 1989: introduction of reduction of car ownership tax with catalytic converter Rapid adoption: end of 1990: 50% of sales concern cars with catalytic converters End of 1992: 100% of new cars have catalytic converters Between 1986 and 1997 car kms increase with 30% in The Netherlands, but NOx emissions decrease with 40%: decoupling

Catalytic converter subsidy (2): 

Catalytic converter subsidy (2) Tax reductions were cut when end of 1992 catalytic converters became mandatory at EU level. Tax reduction was quite high, may be too high? Who paid? Other buyers of new cars: increase in base tax rate of new cars. The base rate increase was accepted by the car sector Reasons for social support At that time: high priority for environmental themes Neutral overall effect for the car sector Just a matter of speeding up Financial instruments can be used effectively to prepare the introduction of strict norms

Alternating High Occupancy Vehicle lane: 

Alternating High Occupancy Vehicle lane Alternating lane on express way near Amsterdam, 7 kms, introduced in 1993 Combination with HOV lane (3 persons in car) High ambition: combination of two ideas: First application of alternating lane in Europe; and one of the first HOV lanes in Europe Increase of users during peak from 1400 to 1700 vehicles in 6 months Confusing debates: time gains of 10 minutes were questioned HOV lane was not used to full capacity: why impose restrictions on it? High construction costs emphasised Large negative media attention Legal aspects: no legal basis to exclude single occupancy vehicles Conclusion: HOV element was dropped in 1994

Introduction of road pricing : 

Introduction of road pricing National government takes lead (since 1988) On and off the political agenda several times Orientation towards high tech Lead taken by central government Fierce negotiations with regions to ‘buy’ their support: use of the receipts to improve regional infrastructures Strong resistance of road user’s associations who consider it as just another tax: car drivers should have a real choice Conclusion: failed because started too early: congestion problems not serious enough no adequate treatment benefit sharing issues between central government and regions and between government and car users

Free public transport pass for students : 

Free public transport pass for students Largest shock in Dutch railway history: +40% in passengerkms in 1990/1991 All students get a free public transport pass in the whole country, reduction of scholarship; no choice New coalition ministry of education and transport. Low occupation rates in public transport get higher: marginal costs are low Existing passengers: crowding and Mohring effect Induced other innovations: students express services Success only because of existing excess supply in public transport

Autodating : 

Autodating Rental cars at walking distance in residential areas. High expectations, large campaigns Private sector involvement Public sector: parking place provision Niche market: in Amsterdam about 1% of households participate (parking problems) in other municipalities: low to zero participation Success only in niche markets

Conclusions (1): 

Conclusions (1) Crisis stimulates innovation: Social sense of urgency (catalytic converter) Catastrophes are vital (for example railway accidents) Large budgetary problems of main actors (free public transport pass for students) Congestion problem; maybe not serious enough at the time Timing is essential Legal aspects are sometimes vital for success and failure of innovation attempts (HOV lane)

Conclusions (2): 

Conclusions (2) Subsidies may make innovative trajectories only artificial or at least overly expensive (traintaxi, catalytic converter), but... Subsidies may also pave the way for social acceptance of regulatory measures (carrot and stick) Communication on benefits of innovation trajectories is vital, but…. Media cannot be controlled and lead to uncertainty on success of innovations

Conclusions (3): 

Conclusions (3) Some conventional wisdom from literature challenged: Small and gradual changes have higher chance of success; Pro: train-taxi, road pricing Con: HOV, transferia, autodate, free public transport pass Spatial level: probability of successful innovation at high spatial level is lower: Pro: road pricing Con: transferia Private sector involvement improves probability of success: mixed results: train taxi, autodate

Research agenda: 

Research agenda Uncertainty on success of innovations: Lack of studies with ex-post cost benefit analyses of innovation trajectories. Legal aspects may be of decisive importance for successful innovation Experts on transport related law have to contribute. Public sector: what mixtures of central and local government initiatives improve probability of successful innovation. Arrangements between public and private sector that contribute to successful innovation.