Author(s)

A. Garcia, N. Georgantzis, V. Orts & J.C. Pernias

Abstract

We study private and public investment in transportation infrastructure under two alternative scenaria concerning the degree of state intervention. The social planner minimises the weighted sum of total transportation costs and investment, according to the negative impact of each magnitude on the natural environment. Public investment is a sensitive environmental policy instrument, especially, if the impact of transportation costs dominates over the impact of infrastructure itself. However, fiscal policy, price control and decentralisation are more successful in reducing the overall environmental damage than is public investment alone. 1 Introduction Most of the dynamic phenomena observed in modern economies are due to a rapidly growing volume of innovations aiming at increasing t

Keywords