CO2 emissions efficiency and marginal abatement costs of the regional transportation sectors in China

Nowadays, evaluating CO₂ emissions efficiency and its marginal abatement cost in transportation sectors has been a hot topic. However, while evaluating the CO₂ marginal abatement cost using data envelopment analysis approach, the weak disposability of CO₂ may imply positive abatement cost, which undoubtedly violates our common sense. To obtain non-positive marginal abatement cost, CO₂ emissions should be treated as an input. To reconcile this contradiction, this paper intends to propose a global, directional distance function model based on previous study to investigate the productivity, economic efficiency, CO₂ emissions efficiency, and marginal abatement cost of the China’s regional transportation sectors during 2007–2012. The results show that: (1) the productivity, economic efficiency and CO₂ emissions efficiency of different regions differ widely. More specifically, the coastal areas of south China perform better than the other areas in terms of productivity, economic efficiency, and CO₂ emissions efficiency. (2) Generally, the economic efficiency is greater than CO₂ emissions efficiency, which is relatively low in most areas. (3) A negative correlation is found between CO₂ emissions efficiency and its marginal abatement cost. For a 1% increase in CO₂ emissions efficiency, the CO₂ marginal abatement cost declines by 102 Yuan (in 2004 constant price). The results imply that improving CO₂ emissions efficiency plays an important role in marginal abatement cost reduction, and it also provides us a new approach to reduce abatement cost besides the technical progress.     

California’s Low Carbon Fuel Standard: Modeling financial least-cost pathways to compliance in Northwest California

The transition to low-carbon transportation fuels plays a key role in ongoing efforts to combat climate change. This analysis seeks to optimize potential alternative fuel portfolios that would lead to a 10% reduction in fuel carbon intensity by 2020 as required under California’s Low Carbon Fuel Standard (LCFS).We present a novel, probabilistic modeling approach for evaluating alternative fuel portfolios based on their marginal greenhouse gas (GHG) abatement costs. Applied to a case study region in Northwest California, our model enables us to quantify the financial cost of GHG reduction via each fuel pathway, as well as for a portfolio deployed to meet the LCFS target. It also enables us to explore the sensitivity of the alternative fuel portfolio, evaluating the impact of fluctuating prices, fuel carbon intensities, and technology penetrations on the makeup of the portfolio and on the average cost of GHG abatement.We find that battery electric vehicles play a critical role, as they offer the lowest-financial-cost significant abatement in almost all plausible scenarios. However, electric vehicles alone will not be sufficient to reach the target; low-carbon biofuels can be expected to play a role in the achievement of 2020 Low Carbon Fuel Standard targets.     

The abatement cost function for a representative vehicle inspection and maintenance program

Mandatory inspection and maintenance programs require on-road vehicles to be tested regularly and repaired if they are not in compliance with air emission regulations. We estimate the abatement cost function for a representative inspection and maintenance program. This is done by constructing a model of the statistical process that leads to non-compliance, parameterizing the model, and then by simulating the total abatement cost function. The model predicts that the marginal abatement cost for a major representative program is so high that even a small reduction in the abatement target leads to substantial cost savings to motorists. In addition, even for quite high levels of the abatement target, the optimal minimum testing age is substantially higher and the frequency of testing is much lower than is common in many jurisdictions.     

Marginal costs of freeway traffic congestion with on-road pollution exposure externality

The health cost of on-road air pollution exposure is a component of traffic marginal costs that has not previously been assessed. The main objective of this paper is to introduce on-road pollution exposure as an externality of traffic, particularly important during traffic congestion when on-road pollution exposure is highest. Marginal private and external cost equations are developed that include on-road pollution exposure in addition to time, fuel, and pollution emissions components. The marginal external cost of on-road exposure includes terms for the marginal vehicle’s emissions, the increased emissions from all vehicles caused by additional congestion from the marginal vehicle, and the additional exposure duration for all travelers caused by additional congestion from the marginal vehicle. A sensitivity analysis shows that on-road pollution exposure can be a large portion (18%) of marginal social costs of traffic flow near freeway capacity, ranging from 4% to 38% with different exposure parameters. In an optimal pricing scenario, excluding the on-road exposure externality can lead to 6% residual welfare loss because of sub-optimal tolls. While regional pollution generates greater costs in uncongested conditions, on-road exposure comes to dominate health costs on congested freeways because of increased duration and intensity of exposure. The estimated marginal cost and benefit curves indicate a theoretical preference for price controls to address the externality problem. The inclusion of on-road exposure costs reduces the magnitudes of projects required to cover implementation costs for intelligent transportation system (ITS) improvements; the net benefits of road-pricing ITS systems are increased more than the net benefits of ITS traffic flow improvements. When considering distinct vehicle classes, inclusion of on-road exposure costs greatly increases heavy-duty vehicle marginal costs because of their higher emissions rates and greater roadway capacity utilization. Lastly, there are large uncertainties associated with the parameters utilized in the estimation of health outcomes that are a function of travel pollution intensity and duration. More research is needed to develop on-road exposure modeling tools that link repeated short-duration exposure and health outcomes.     

The effectiveness and costs of speed reductions on emissions from international shipping

Greenhouse gas emissions from international shipping are an increasing concern. The paper evaluates whether vessel speed reduction can be a potentially cost-effective CO₂ mitigation option for ships calling on US ports. By applying a profit-maximizing equation to estimate route-specific, economically-efficient speeds, we explore policy impacts of a fuel tax and a speed reduction mandate on CO₂ emissions. The profit-maximizing function incorporates opportunity costs associated with speed reduction that go unobserved in more traditional marginal abatement cost analyses. We find that a fuel tax of about $150/ton fuel will lead to average speed-related CO₂ reductions of about 20–30%. Moreover, a speed reduction mandate targeted to achieve 20% CO₂ reduction in the container fleet costs between $30 and $200 per ton CO₂ abated, depending on how the fleet responds to a speed reduction mandate.     

The marginal external costs of urban transport

A necessary input for the analysis of efficient transport policies is the marginal external cost of each transport mode. This paper studies the marginal external costs of urban transportation. These include the marginal external cost of congestion, accidents, air pollution and noise. The costs are computed for cars, buses, trams, metro and trucks. The methodology is described and applied to the urban area of Brussels for the year 2005.     

Estimating the marginal cost of railway track renewals using corner solution models

Economic theory advocates marginal cost pricing for efficient utilisation of transport infrastructure. A growing body of literature has emerged on the issue of rail marginal infrastructure wear and tear costs, but the majority of the work is focused on costs for infrastructure maintenance. Railway track renewals are a substantial part of an infrastructure manager’s budget, but in disaggregated statistical analyses they cause problems for traditional regression models since there is a piling up of values of the dependent variable at zero. Previous econometric work has sought to circumvent the problem by aggregation in some way. In this paper we instead apply corner solution models to disaggregate (track-section) data, including the zero observations. We derive track renewal cost elasticities with respect to traffic volumes and in turn marginal renewal costs using Swedish railway renewal data over the period 1999–2009. This paper is the first attempt in the literature to apply corner solution models, and in particular the two-part model, to disaggregate renewal cost data in railways. It is also the first paper that we are aware of to report usage elasticities specifically for renewal costs and therefore adds important new evidence to the previous literature where there is a paucity of studies on renewals and considerable uncertainty over the effects of rail traffic on renewal costs. In the Swedish context, we find that the inclusion of marginal track renewal costs in the track access pricing regime, which currently only reflects marginal maintenance costs, would add substantially to the existing track access charge. EU legislation requires that access charges reflect the ‘costs directly incurred as a result of operating the train service’, which should include a marginal renewal cost component. This change would also increase the cost recovery ratio of the Swedish infrastructure manager, thus meeting a policy objective of the national government.     

A review and analysis of the investment in,and cost structure of,intermodal rail terminals

The results presented in this article identify the role of costs in the scientific and grey freight terminal handling literature and analyses the handling costs of different terminal sizes. The literature review shows that handling costs only play a marginal role in the scientific research in intermodal rail freight terminals (IRT). This is remarkable given the large role costs occupy in decision-making in freight transport. Furthermore, the used cost levels show a wide range of proposed amounts and terminal sizes or handling technologies are seldom addressed. Finally, many of the scientific papers do not make it clear whether the average transhipment cost or market price is referred to. Next, the analysis of the investment in, and cost structure of, IRTs shows that IRT investments are very capital-intensive leading to relatively high average costs per handling. However, given the cost characteristics of IRTs, the average cost per handling represents the underlying cost structure and are – in this sense – representative. The cost analysis demonstrates that extra-large IRTs actually have the lowest average handling costs, followed by small IRTs.     

Marginal railway track renewal costs: A survival data approach

In this paper, renewal costs for railway tracks are investigated using survival analysis. The purpose is to derive the effect from increased traffic volumes on rail renewal cycle lengths and to calculate associated marginal costs. A flow sample of censored data containing almost 1300 observations on the Swedish main railway network is used. We specify Weibull regression models, and estimate deterioration elasticities for total tonnage as well as for passenger and freight tonnages separately. Marginal costs are calculated as a change in present values of renewal costs from premature renewal following increased traffic volumes. The marginal cost for total tonnage is estimated to approximately SEK 0.002 per gross ton kilometre.     

Public regulation and passengers importance in port infrastructure costs

Because ports are conceived and designed mainly to be the transfer point of various types of freight, passengers tend to be forgotten in the analysis of port costs. In this paper first we investigate the importance of passengers in port infrastructure costs by means of a multi-output cost function estimated from 20 annual observations (1986-2005) for 26 Spanish Port Authorities. Results show that, although a passenger weights on average less than one tenth of a ton, he or she represents as much as two tons of solid bulk and about three tons of containerized general cargo in terms of marginal costs. Secondly, we compare the marginal costs of different cargoes with their price caps established by law. Results suggest that some type of second best pricing is induced by present regulation.     

An econometric analysis of motorway renewal costs in Germany

The analysis of motorway renewal costs presented in this paper was driven by two research questions: First, to analyse the economic process of motorway renewal work and to identify whether there exist economies of scale; and second to identify the influence of traffic volume on renewal costs and to derive an estimate of marginal infrastructure costs as part of optimal road user charges. The analysis is based on cross-sectional data for motorway renewal costs and traffic volume in Germany during the period 1980–1999. Two translog models were estimated, each of them including the factor input prices for labour, material and capital, and a set of regional dummy variables as well as dummy variables for the type of material used for renewal. The first model includes in addition to these variables the sqm of renewed road as explanatory variable. The second model was constructed to analyse the relationship between traffic volume and renewal costs and contains the average annual daily traffic volume of trucks and passenger cars as independent variables. Two main results were derived from the models: First, motorway renewal work is characterised by substantial economies of scale. Second, the relationship between renewal costs and traffic volume is expressed by a cost elasticity, i.e., the ratio between marginal and average costs, which ranges from 0.05 up to 1.17 with a digressive increase of marginal costs.     

Environmental rail charges in Europe: a review

European legislation implies the use of marginal social cost pricing in rail access charges levied on rail operators. Thus, they may include specific environmental charges to internalise the impacts of rail transport. However, when applying these principles in practice, several difficulties call for second-best settings adapted to the particularities of the rail market. In this context, few European railway administrations are already implementing rail access charges with an environmental dimension. This paper reviews the literature on the issue and assesses the current European experience in noise and air pollution rail charges. For this purpose, an analytical framework is built on the definition of four basic dimensions: charging approach, allocation of abatement efforts, degree of differentiation and intermodal approach. The qualitative examination of the existing systems suggests that the level of environmental surcharges can be generally increased given the low substitutability between rail and road and that the range of abatement possibilities should be enlarged by further differentiating charges. It is also found that the pricing scope should be adapted to achieve particular cost-efficient allocations of abatement efforts among rail operators and upstream agents. Finally, further research requirements for a quantitative assessment are defined.     

A multioutput cost function for the services of Spanish ports' infrastructure

A long run multioutput cost function for the infrastructure services of Spanish ports is estimated using 286 observations on 26 ports during 11 years. Cargo specific marginal costs and the degree of economies of scale and scope are calculated up to a port level. Results show that liquid bulk and non-containerised general cargo present the lowest and largest marginal cost, respectively. Increasing returns to scale are present in general and for each and every port. A scope analysis indicates that port specialisation is not appropriate from the viewpoint of infrastructure.     

The marginal social cost of headway for a scheduled service

This brief paper derives the marginal social cost of headway for a scheduled service, i.e. the cost for users of marginal increases to the time interval between departures. In brief we may call it the value of headway in analogy with the value of travel time and the value of reliability. Users have waiting time costs as well as schedule delay costs measured relative to their desired time of arrival at the destination. They may either arrive at the station to choose just the next departure or they may plan for a specific departure in which case they incur also a planning cost. Then planning for a specific departure is costly but becomes more attractive at longer headways. Simple expressions for the user cost result. In particular, the marginal cost of headway is large at short headways and smaller at long headways. The difference in marginal costs is the value of time multiplied by half the headway.     

Multioutput analysis of trucking operations using spatially dissaggregated flows

The operation of a trucking system at a national scale is analyzed by means of an operating multioutput cost function, which recognizes flows with different origin and destination as distinct components of the transportation product. The original, fully disaggregated, information on O-D specific flows is used to generate distance-weighted and pure-flow output vectors, whose dimension allows for the estimation of flexible cost functions. Different models are compared in terms of O-D specific marginal costs and second derivatives in common units, obtained through manipulations of both the estimated parameters and their variance-covariance matrix. Results indicate that marginal costs are not proportional to distance. Constant returns prevail in the operation of the system, simultaneously with economies of spatial scope and cost complementarity between flow pairs, with one exception which suggests some regional specialization. On methodological grounds, the bias on scale economies introduced by the single aggregated output measure (ton-km) becomes evident, and partial aggregation in terms of distance-weighted zonal flows seems more appropriate than pure flow aggregation when distances are heterogeneous. The multioutput formulation with O-D specific flows under a flexible form of the cost function, is recommended for meaningful policy analysis of transportation systems.     

Integrated modeling of high performance passenger and freight train planning on shared-use corridors in the US

This paper studies strategic level train planning for high performance passenger and freight train operations on shared-use corridors in the US. We develop a hypergraph-based, two-level approach to sequentially minimize passenger and freight costs while scheduling train services. Passenger schedule delay and freight lost demand are explicitly modeled. We explore different solution strategies and conclude that a problem-tailored linearized reformulation yields superior computational performance. Using realistic parameter values, our numerical experiments show that passenger cost due to schedule delay is comparable to in-vehicle travel time cost and rail fare. In most cases, marginal freight cost increase from scheduling more passenger trains is higher than marginal reduction in passenger schedule delay cost. The heterogeneity of train speed reduces the number of freight trains that can run on a corridor. Greater tolerance for delays could reduce lost demand and overall cost on the freight side. The approach developed in the paper could be applied to other scenarios with different parameter values.     

A framework for estimating traffic emissions: The development of Passenger Car Emission Unit

In this study, we develop a Passenger Car Emission Unit (PCEU) framework for estimating traffic emissions. The idea is analogous to the use of Passenger Car Unit (PCU) for modeling the congestion effect of different vehicle types. In this approach, we integrate emission modeling and cost evaluation. Different emissions, typically speed-dependent, are integrated as an overall cost via their corresponding external costs. We then develop a normalization procedure to obtain a general trend that is applicable for all vehicle types, which is used to derive a standard cost curve. Different vehicle types with different emission standards are then mapped to this standard cost curve through their corresponding PCEUs that are to be calibrated. Once the standard cost curve and PCEUs have been calibrated, to estimate the overall cost of emission for a particular vehicle, we only need to multiply the corresponding PCEU of that vehicle type to the standard cost curve. We apply this PCEU approach to Hong Kong and obtain promising results. Compared with the results obtained by the full-blown emission model COPERT, the approach achieves high accuracy but obviates tedious inputs typically required for emission estimation.     

Measuring marginal congestion costs of urban transportation: Do networks matter?

In determining the marginal cost of congestion, economists have traditionally relied upon directly measuring traffic congestion on network links, disregarding any “network effects,” since the latter are difficult to estimate. While for simple networks the comparison of the network-based congestion costs with the link-based ones can be done within a theoretical framework, it is important to know whether such network effects in real large-scale networks are quantitatively significant.In this paper we use a strategic transportation planning model (START) to compare marginal congestion costs computed link-by-link with measures taking into account network effects. We find that while in aggregate network effects are not significant, congestion measured on a single link is a poor predictor of total congestion costs imposed by travel on that link. Also, we analyze the congestion proliferation effect on the network to see how congestion is distributed within an urban area.     

Commuting costs and the residential mobility of job changers

In traffic and transport research, attention is given to the relevance of location patterns of activities to moving behaviour, the inverse causality being mostly left out of account. This paper considers what influence (changes in) travel costs have on moving behaviour and residential choice. The analysis has been carried out for employed people who change jobs. The residential choice has been split into a marginal probability of moving and a conditional destination choice. Both choices appear to be influenced significantly by travel‐cost variables.     

Alternative methods for estimating full marginal costs of highway transportation

This paper presents various methods of estimating the full marginal cost (FMC) of highway passenger transportation. First, the computation of FMC is performed using the marginal cost functions, most of which were developed by Ozbay et al. [Ozbay, K., Bartin, B., Berechman, J., 2001. Estimation and evaluation of full marginal costs of highway transportation in New Jersey. Journal of Transportation and Statistics 4 (1)]. FMC is defined and calculated as “total cost per trip” as explained in this paper. However, in multiple origin-destination and multiple route highway networks, the practical application of the network-wide FMC concept is complicated. These issues are addressed in detail in this paper. Therefore, in the second method, a multiple route based FMC approach is proposed for a given origin-destination pair in the network. It is observed that the marginal values of different paths vary as much as 28%. Third, a comparison of FMC estimation results of two distinct measurement tools is presented. The FMC estimation is performed between a selected OD pair using the static transportation planning software output (TransCAD). The same analysis is repeated using the stochastic traffic simulation software output (PARAMICS). The differences in FMC values estimated by static transportation planning software and microscopic traffic simulation software are discussed.