Case study analysis of the burden of taxation and charges on transport

This study has been carried out in the context of the broader work on internalisation of external costs of transport. External costs are costs to society that, without policy intervention, are not reflected in the costs actually borne by transport users. Transport users are thus faced with incorrect incentives for transport supply and demand, leading to welfare losses for the society as a whole. Internalisation, which is often referred to as the ‘user pays’ and ‘polluter pays’ principle, means that these costs are made part of the decision making process of the users, usually by use of market based instruments. The principle is inter alia also crucial for any discussion on multi-modal transport and in a broader sense on the circular economy.

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