Pollutants Haven't Left Town. For Lack of Market-Based Policies
Bicycle lanes, limited traffic and pedestrian areas, i.e. the urban transport policies most frequently implemented by Italian municipalities to curb pollution, are ineffective, while the adoption of coordinated plans has only a very weak effect, Marco Percoco of the Department of Institutional Analysis and Public Management states in Urban Transport Policies and the Environment: Evidence from Italy (International Journal of Transport Economics, Anno XXXVII/2, 2010).
The analysis of a novel dataset covering eighty major Italian cities confirms that the "command-and-control" policies aren't efficient. On the other hand, the adoption of market-based instruments such as incentives to the use of public transport and, in particular, road pricing, proved effective by scientific literature and experience, is shunned for political convenience, lacking the necessary support by Italian voters.
The quality of the environment in Italian cities dramatically deteriorated between 1993 and 2005 in terms of PM10 and NO2 concentrations (the pollutants Percoco chooses as dependent variables in his model) and the greenhouse gas emissions were responsible for more than half of the costs associated with transport externalities, estimated in €107.1 billion in 2004.
"According to my econometric analysis, the instruments adopted by Italian municipalities have no effect in terms of pollution controls, while the adoption of transport plans seems to produce minor effects at most. This puzzling finding may be interpreted in the sense that the sum of instruments has no significant effect on NO2 and PM10 concentration unless policies are coordinated by a plan".
The effectiveness of market-based measures is confirmed by the experience of Milan, the city that, starting January 2, 2008, introduced a road pricing scheme aimed at reducing pollution in the city centre (the Ecopass): during the first year of application, the Ecopass has resulted in a 4% increase of average speed, a - 20.6% change in road accidents, reductions of 18% and 17% of PM10 and NOx concentrations respectively, as reported by the Agenzia Milanese Mobilità e Ambiente.
Percoco spends a final word on social capital: "My econometric analysis found that the higher the 'civicness', the lower the concentration of pollutants in the atmosphere. From a policy perspective, this result should be interpreted as evidence for the crucial role of actions intended to increase public concern over environmental quality, and to reduce, through better information and education, free riding".