Transport and Covid-19: responses and resources

Assessing Regulatory Changes in the Transport Sector Roundtable

Cost of trucking
In the transport sector, Cost-Benefit Analysis (CBA) is increasingly used to guide decisions on infrastructure investment and maintenance, and detailed guidelines exist at the national level. However, the evaluation of impacts from regulatory changes is much less widespread, despite the potentially large effects (both positive and negative) of regulatory changes on a range of stakeholders – both within the transport sector (users, businesses, workers) and society as a whole.

Some governments, regulatory authorities and supranational organisations have nonetheless developed a practice of regulatory impact assessment (RIA) over the last 15-20 years. RIA is a process “to examine and provide relevant information to decision makers and stakeholders about the expected consequences of proposed regulation and a range of alternative options which could address the government’s policy issues. By providing a better informed, objective, evidentiary basis for making regulations, RIA seeks to ensure that the policy development process consistently delivers regulations (or other policy solutions) that provide the greatest benefit to the community, relative to the overall costs imposed” (Australian Productivity Commission, 2012).

Jurisdictions from the European Union to Mexico now require RIA of legislative and regulatory change (including in relation to transport policy changes) whenever the socio-economic impacts are expected to be significant. For example, this applies to changes in competition policy and to the introduction of new technical/environmental requirements.

A number of techniques can be employed to carry out regulatory impact assessments, such as CBA, Cost-Effectiveness Analysis (CEA) and Multi-Criteria Analysis (MCA). CBA is most widely used as it allows a range of options to be compared on a consistent basis.

While OECD countries are increasingly adopting some of these methodologies, challenges remain in ensuring that RIA is an effective tool for policy making. These include calibrating the depth and scope of the assessment to the significance of the policy and regulation being assessed and the use of RIA in the early stages of the decision-making process so that it can be used to evaluate different policy options (OECD, 2015 Regulatory Policy Outlook).

In this context, participants at the Roundtable tackled some of these challenges. Following each presentation by the paper authors, participants engaged in a discussion around the issues presented.

The issues addressed include: the treatment of effects that are difficult to predict, such as those from market liberalisation and the regulation of disruptive technologies; the treatment of distributional impacts that are affected by choices over the perimeter within which costs and benefits are assessed, given that regulatory changes in transport give rise to a range of impacts across other sectors too; the integration of dynamic impacts (short and long term) and indirect effects of regulatory change into RIA frameworks; and institutional barriers to the implementation of RIA, demanding that appropriate incentives and oversight capabilities are in place across regulatory agencies.

The Roundtable thus aimed to promote the exchange of good practice with a view to consolidating experience in the design of impact assessments for regulatory changes in the transport sector, drawing valuable policy lessons across jurisdictions. Participants included government officials, academics, and industry practitioners.

Videos

Chair's Summary

Russel Pittma, US Department of Justice

The Possible Role of RIA in Swedish Transport Planning

Lena Nerhagen, Swedish National Road and Transport Research Institute VTI; Sara Forsstedt, Swedish Transport Agency

Assessing Consumer Welfare Impacts of Aviation Policy Measures

Guillaume Burghouwt, SEO Amsterdam Economics

Introducing Competition in the European Rail Sector

Yves Crozet, University of Lyon

Assessing the Impacts of the Road Safety Remuneration System in Australia

Rex Deighton-Smith, Jaguar Consulting Pty Ltd

Focus on Costs and Ethical Considerations: Assessing the Impacts of Regulating Vehicle Emissions and Safety

Bert van Wee, Delft University of Technology

Impact Assessments in EU Policy Making

Vesna Valant