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We study how full automation of the car fleet affects traffic volumes, congestion, and fuel consumption at the country level in Belgium. The central scenario in this paper looks at the combined effect of a lower opportunity cost of travel time, an increase in the acquisition price of cars by 20%, a decrease in insurance costs by 50% and a decrease in fuel consumption per km by 10%. The improvement in fuel efficiency always dominates the increase in acquisition costs, and average monetary costs decrease. Overall car travel increases by 21 up to 26%. Despite the improvement in fuel efficiency, total fuel consumption for diesel and gasoline increases by 5 up to 10%. The impact on the speed of road modes is highly location specific. A sensitivity analysis revealed that there is a threshold improvement in fuel efficiency where the “rebound effect” is nullified. To counteract the effects of full automation on total demand for car travel, a road charge close to 20 EUR cent per km would be needed., European Journal of Transport and Infrastructure Research, Vol. 22 No. 3 (2022)

We estimate a discrete-continuous model of vehicle demand and use for the Belgian region of Flanders, combining the results of the official regional travel survey with a detailed database of vehicle characteristics. The overall predictive value of the submodel predicting the number of vehicles owned by each household is satisfying, and in line with expectations. However, existing data turn out to be relatively poor predictors of the vehicle class owned by households and of the annual mileage per vehicle. We argue that the current travel survey focuses on determinants of travel in the peak periods. In order to predict overall travel demand, future versions of the travel survey should identify indicators with a higher predictive value for travel behavior for other than commuting purposes.

This paper reviews the available evidence on the relevance of the Porter hypothesis for automotive emission standards. It focuses on two channels through which the Porter effect may operate. First, there is evidence that emission standards for cars have had important effects on innovation at different levels in the supply chain (the “weak” form of the Porter hypothesis), without discernible long-run negative effects in industry performance. However, there is no strong evidence either that regulations lead to an overall increase in productivity (the “strong” version of the Porter hypothesis). Second, there is relatively strong evidence that countries are more likely to have more stringent domestic vehicular emission standards if they export more automobiles and automobile components to countries which themselves have more stringent vehicular standards. There is also (mixed) evidence that countries which receive more inward foreign direct investment in the automotive sector are more likely to have more stringent domestic emission standards. This suggests that imposing strict emission standards may bring some “first mover advantages” to the leading countries, in line with the Porter hypothesis.

A multi task principal-agent model is employed to derive optimal environmental liability rules for risk neutral managers under two alternative organizational structures - a functional organization and a product-based organization. For a product-based organization it is shown that efficiency is independent of whether the firm or managers are liable for environmental damages. In a functional organization it is optimal either to hold the firm liable for environmental damages or, equivalently, not to hold the production managers liable for environmental damages. We derive conditions to obtain the first-best solution for a given organizational structure. Finally, the organizational form that induces the highest environmental effort induces the lowest production effort and vice versa. This suggests that production and environmental protection are substitutes rather than complements.

In 2007-2008, ARCADIS has conducted a study on behalf of the Flemish government, with as main objectives a review and a critical analysis of the existing calculations of environmental health costs in Flanders. This study covers the effects on human health of air pollution due to particulates and tropospheric ozone. Despite the large uncertainty surrounding individual estimates, we can be confident about the order of magnitude of the yearly marginal “cost of illness” due to PM2.5, PM10 and ozone (a few dozens of millions EUR per 10µg/m³). If we also take into account the “subjective” health costs, our estimates run in the billion EUR.

We consider an inspection game between $n$ polluting firms and an environmental enforcement agency. If the cost of monitoring ambient pollution is low enough, the optimal inspection policy consists in imposing the maximal possible fine, and mixing between observing ambient pollution and not conducting any inspection at all. However, with stringent upper limits on the fine, the agency mixes between observing ambient pollution and inspecting all firms. The observation of ambient pollution is always followed by sequentially rational firm inspections. Comparisons with Franckx (2002a,2002b) show that commitment power has a very strong impact on the value of prior information.