Eliminating fossil fuel subsidies to reduce traffic congestion: Aussie study

Source: Xinhua| 2017-10-24 08:30:36|Editor: Zhou Xin
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CANBERRA, Oct. 24 (Xinhua) -- Fossil fuel subsidies are major contributors to traffic jams in large cities and introducing fuel excises will lead to less congestion, said an economist from the Australian National University (ANU).

Dr. Paul Burke studied the traffic patterns in Jakarta, Indonesia both before and after fuel subsidies were cut, finding that when the government stopped subsidizing fuel costs for consumers, the number of traffic jams decreased.

In a media release on Tuesday, Burke said it was astounding that some nations were still subsidizing fossil fuels, saying that taxes would instead raise money and reduce the number of cars on the road.

"Fuel subsidies lead to traffic jams and underuse of public transport. They change the way a city operates," Burke said in a statement released late Monday.

"We estimate that there are currently around 10 percent fewer vehicles on the roads in our study as a result of Indonesia's fuel price reforms. The traffic flows more freely than it would have without the reforms.

"The complete elimination of fossil fuel subsidies would help economies develop in a more environmentally-friendly way, and with fewer traffic jams."

He added that Australia currently has a fuel tax -- the opposite of a subsidy -- which slugs consumers 40.3 Australian cents (31.5 U.S. cents) per litre. According to the Australian government, the excise raises around 16 billion Australian dollars (12.5 billion U.S. dollars) every year.

But he admitted with the current, albeit slow, shift towards electric and hybrid vehicles, and some governments might need to consider other ways to raise taxes in order to account for the eventual shortfall in tax revenue.

He said that a "GPS-based" tax might be a viable option for Australia in the future.

"If you are driving into the Sydney CBD at 8 a.m. on a Monday, you'd be charged a road-user charge. If you're driving in an area with little traffic you would pay much less per kilometer traveled," he said.

"The advantage of this system is that it can help to ease traffic hotspots."