Is it an Effective Way to Use the Market Based Instruments for the Reduction of Vehicle Emission?

ABSTRACT:

This paper is based on the research on taxation and other market base instruments use in Sri Lanka with regard to Motor vehicles which will be correlated with the magnitude of the Urban Air Pollution by Motor Vehicles and its impacts. This research was focused on the Demand Management Tools of Urban Traffic Congestion taking specific taxes and duties introduce in Sri Lanka This paper analyses demand for vehicle ownership using research findings in the country considering price elasticity and income elasticity. All market based instruments applied on vehicle ownership has examined with the numbers which are currently and historically applicable in Sri Lanka. This paper analyses all market based instruments implement and their impact on demand side through empirical studies at international level. The impact of the investment of road infrastructure with comparative analysis with revenue has included in the analysis in order to established the user cost and its impacts for demand side.

The theoretical model was applied to make the conclusion about the impact of the each and every market based instrument implemented in Sri Lanka. It also evaluate the travel demand identifying dependent and independent variables with their magnitude considering the individual(private) cost and society cost(public cost) which leading to a conclusion and recommendation of the paper. The impact of the tariff of public transport assessed in order to estimate the shift from private mode to public mode of transport and modal shift. This paper has evaluated the welfare losses or gains due to prices of petroleum based fuel, and also calculated the welfare effects using mathematical models in order to lead to valuable conclusion at the end of research paper. Finally, hypothetical proposal for congestion toll applied to see the impact of vehicle emission reduction by reducing urban traffic congestion (Application for City of Colombo) introducing public transport scenario such as Bus Rapid Transit Systems.