Marginal cost pricing has been identified, both in the (theoretical)
economic literature and in various Commission documents, e.g. in
the White Paper on Fair payment for infrastructure use (1998), as
the pricing regime that maximises efficiency in the transport system
and sector. However, examples of its implementation in transport
are rare. Even in situations where efficiency is the primary concern,
non-price regulatory measures have been far more common while marginal
cost pricing is typically viewed as a theoretical concept that is
too difficult to put into practice. In practice, in those cases
where pricing has been implemented, it has not been marginal cost
pricing but its aim has rather been to collect revenue.
A starting point of the study is the obvious tension or paradox
between the economic theory, which suggests marginal cost pricing
is the right solution, and practical experience, which suggests
that such pricing measures are hard to implement. In particular,
road pricing, which has attained greatest attention in the literature
and policy debate, appears to enjoy notably scant support among
the population in general and is a controversial topic among politicians
and professional policymakers.
The reasons for this situation can be manifold:
(i) the gap between the underlying economic theory of marginal cost
pricing and the requirements for practical implementation may be
(ii) important legal and institutional barriers to implementing
marginal cost pricing in practice may exist;
(iii) concerns of the distributional effects of marginal cost pricing
may in practice overshadow considerations of the positive efficiency
(iv) public and political acceptance of marginal cost pricing may
be low because of various non-economic factors.
This MC-ICAM study is designed to address the issues and questions
related to the phased approach to implementation, while having a
clear primary focus on intermodal situations. The study will identify
and include all significant intermodal competition distortions and
related issues affecting the implementation of marginal cost pricing.
Naturally, in order to allow for all relevant information and to
be able to provide a balanced overall picture (in a situation where
modal level distortions may be interlinked with intermodal distortions),
the study will also cover intramodal and intersectoral situations.