3 Other impacts of measures in the Climate Budget

3.1     Other cost-benefit impacts

Many of the measures in the Climate Budget have other benefit or cost impacts besides reductions in GHG emissions. An example of a benefit is lower air pollution and thus better air quality and health, as a result of measures which reduce car use. The measures could have economic consequences not covered by the city treasury. The electrification of vehicles is one example of a measure which could lead to higher costs for industry and residents in the short term, although lower running costs mean that the costs over the lifetime of the vehicle will not necessarily be higher. A number of measures will lead to an increase in sales of biofuels, which could potentially have negative effects for GHG emissions or biodiversity elsewhere in the world. The City of Oslo imposes requirements regarding sustainable biofuels in its procurements.

3.1.1   Distributional impacts

Measures in the Climate Budget may have different distributional impacts. The City Government wants distributional impacts to be analysed for all measures. However, this is groundbreaking work in an area where little information is currently available. A discussion is presented below of the distributional impacts of climate measures within mobility and fossil-free construction sites. The distributional impacts of the measures were assessed in isolation and independently of each other.

The distributional impacts of the following measures have been assessed:

• Measure 5: Road toll payment system
• Measure 7: Better cycling facilities
• Measure 8: Legislation for taxis: zero emissions by 2025
• Measures 9, 12 and 19: Goods and service transport vehicles
• Measure 17: Increased investment in public transport
• Measure 22: Street and parking measures
• Measure 24: Requirements regarding fossil-free construction sites

General considerations regarding mobility

Women tend to walk more than men, travel on public transport more and use a car less. People on low incomes tend to walk more and travel on public transport more. Amongst persons over the age of 24, the proportion who walk is highest amongst those with the lowest and highest education. Amongst persons over the age of 24 who do not have an education after primary school, the proportion travelling by car is lower than amongst other groups. Those with a higher income tend to travel by car more, but they also tend to cycle more. Those born in Norway tend to travel less by public transport less and more by car than those born in other countries.

The road toll payment system (measure 5)

On 1 June 2019, new road toll stations and a new road toll system were introduced, with more road toll sections in Oslo and the former Akershus. As a result, residents in all areas of Oslo now pay more to travel by car than before. Amongst residents of different districts of Oslo, the payment previously ranged from 8 % of car journeys (Bygdøy) to 45 % of car journeys made by residents of Oslo West (Urbanet Analyse, 2017). The current system means that persons living in the inner city, Oslo North, Hovinbyen, Østensjø and Bygdøy pay road tolls more frequently now than was previously the case. Persons living in the eastern part of the outer city and Oslo South also tend to pay road tolls more often than was previously the case, but the change is less for these groups. The current system is thus fairer geographically than before, and between 55 and 60 % of all car journeys made in Oslo are now subject to road tolls. Persons living outside Oslo are less affected than those who live in Oslo. No account has been taken of whether the journey was made by electric car or another type of car, as the underlying data did not include any information about this.

The analyses show that men tend to pay road tolls more often than women, because they tend to travel by car more. Households with multiple members are affected more than single persons, and those with medium or high incomes are affected to a greater extent than those with low incomes. This is because those with higher incomes tend to travel by car more to get to and from work. Travel to and from work is also affected more than other types of travel. The income disparities between those who pass road toll section boundaries are somewhat greater for rush-hour travel than for other journeys (Urbanet Analysis, 2017). Any future tax changes could have a different impact depending on the orientation of these.

The road toll payment system generates revenue which is used to increase accessibility for all road user groups and to finance road and public transport improvements. These benefits were not considered. The road toll payment system also reduces car use and GHG emissions and improves the urban environment (Norwegian Public Roads Administration, 2019).

Better cycling facilities (measure 7)

The bicycle is a readily accessible and affordable means of transport. Facilitating safe cycling thus offers the possibility of greater mobility for groups of the population who cannot afford or are unable to use a car, and in cases where public transport is not a viable alternative.

A cohesive and safe cycle path network makes the bicycle a more attractive means of transport for many groups in the population (children, women, the elderly, etc.), as road safety is improved and it feels safer to cycle on cycle paths rather than public roads. Safe cycling infrastructure offers particular benefits in areas with low public transport provision and areas with a heavily loaded public transport system and/or road network. An increase in the number of cyclists using the streets can help to improve public safety in vulnerable areas (Spacescape, Markör, 2016).

There are major health benefits associated with switching from passive to active forms of travel like cycling (Journal of the Norwegian Medical Association, 2020). Where an increase in cycling results in less car use, this will also reduce air and noise pollution, which will be especially beneficial for those living in areas with heavy traffic.

By removing parking spaces on public streets in favour of cycling infrastructure, public land will benefit more groups within the population. The reduction in the number of on-street parking spaces could disadvantage some groups, such as people with disabilities and businesses that depend on goods and service transport. The consequences of facilitating cycling are assessed in connection with the planning of new routes, and mitigation measures are implemented in order to maintain accessibility for the aforementioned groups wherever possible. Mitigation measures could for example include reserved parking for disabled persons and goods deliveries at suitable locations in areas close to where parking spaces have been removed.

Taxi legislation (measure 8)

Oslo has introduced environmental requirements for taxis. As early as 2017, a range of zero-emission cars were available which could match the overall cost of conventional fossil fuel cars. Since then, zero-emission cars have developed rapidly. It is assumed that the environmental requirement will not adversely affect the incomes of taxi drivers, if the necessary charging and refuelling infrastructure is in place before the environmental requirement enters into force (City of Oslo, Agency for Urban Environment, 2017). The coronavirus pandemic and its associated measures and new national permit regulations are likely to have a greater impact on the industry. Developments in the industry going forward as regards profitability and structure are therefore uncertain. This is discussed in a report from the Institute of Transport Economics and the Fafo Research Foundation on taxis in Norway through to 2020 (Institute of Transport Economics, 2020).

Goods and service vehicles (measures 9, 12 and 19)

Climate requirements will affect the goods transport industry, but it is uncertain exactly how it will affect the industry and what it will mean for different types of businesses. In 2020, a survey was conducted in the industry, which was followed up by a number of in-depth interviews (Hafslund, 2021; Zero, 2021). Barriers to the transition to zero-emission heavy transport were then examined. The most important barrier highlighted by the industry is financial risk. This applies to both small and large players. It can be assumed that businesses which operate with low margins will be worst-placed to adapt and make substantial investments in new zero-emission vehicles. Predictability concerning instruments is important for businesses if they are to plan purchases and see the overall cost of their investments.

Facilitating the more efficient transport of goods and services will result in a reduction in the number of vehicle-kilometres per product. Both a reduction in the number of vehicle-kilometres and the electrification of vans and trucks will make a general contribution to lower NOx emissions, lower noise levels, and a better urban environment for those living or staying in the area in which the transport takes place.

Increased investment in public transport (measure 17)

Good mobility solutions bring people from different parts of a region together and reduce inequality by giving everyone the practical and financial opportunity to participate in working life and lead an active life outside work (Ruter, 2020a).  Public transport is for everyone and gives everyone the opportunity to travel. In Oslo, 34 % of the population live in a household which has no access to a car. In the inner-city area, this applies to more than half of the population. Attractive public transport services help to make this possible. More than half of the city’s population live less than 500 metres from a public transport stop which is convenient for them. 80 % of the population live in an area with public transport services with at least four departures per hour (Urbanet Analyse, 2021).

Public transport is funded through ticket revenue, funding from the road toll payment system and public procurement. Funding through the road toll payment system involves a transfer from those travelling by car to those travelling by public transport. However, both public transport and the road toll payment system itself ensure better accessibility on the roads for commercial traffic and for those who have to travel by car, as both help to reduce traffic on the roads.

Street and parking measures (measure 22)

As far as the Agency for Climate is aware, no systematic analysis has been carried out of who will benefit or be disadvantaged by the parking measures in Oslo, or how it will impact on different groups. In recent years, the City of Oslo has redeployed many spaces for use by cyclists, to improve the accessibility of public transport and for city living. This entails the reallocation of land from those who travel by car to cyclists, public transport users and people in the city. In practice, these will often be the same people, albeit in different situations. Emphasis has been placed on ensuring access to parking for disabled permit holders, and provision for goods deliveries.

In 2015, the Institute of Transport Economics studied the distributional effects of parking facilities with regard to housing and employment (Institute of Transport Economics, 2015). The study showed that, although single people and those on low incomes do not tend to have their own parking space, they do tend to have good public transport services close to their home. In Oslo, many buildings were completed before the municipality began to require parking spaces close to housing. The current parking regulations indicate that fewer parking spaces are being established adjacent to smaller apartments in central districts. These are apartments where small households, younger people and students on lower incomes can live. Homes with parking spaces are also more expensive than those without. As regards workplaces, there are minor differences in parking access at workplaces linked to income and household structure. People earning less than NOK 200,000 are more likely to state that they do not have their own parking space close to their workplace. However, these people have good public transport provision close to where they live. There is no difference between households with an income in excess of NOK 200,000.

The residents’ parking scheme (City of Oslo, City Council, 2012) was first introduced on a trial basis in the districts of Frogner, St. Hanshaugen and Gamle Oslo in January 2009. The scheme was evaluated later the same year (Urbanet Analyse, 2009). The evaluation consisted of a pre- and post-trial survey which involved the recording of cars and questionnaire surveys. The evaluation showed that the scheme has given residents easier access to parking where they live, in accordance with the aim of the scheme. The proportion of parked cars of external origin, i.e. cars that did not belong to residents in the district, was significantly reduced, especially in Frogner and St. Hanshaugen. Nine out of every ten residents found it easier to find a parking space. More than half agreed with the statement “Residents’ parking makes it easier for me to live in central Oslo”. The picture was more mixed for the business community. When the scheme was made permanent, changes were made to the scheme to take account of this. For example, the rule concerning maximum parking time was abolished.

Requirements regarding fossil-free construction sites (measure 24)

In autumn 2020, the Vice Mayor for Urban Development pursued a dialogue with the major industry players regarding requirements for fossil-free construction sites. During these meetings, it was stated that the industry can meet the requirement, but at an additional cost. Requirements regarding fossil-free construction sites mean that biofuel must be used, which is more expensive than fossil fuels. Biofuels cost around 50 to 100 % more than traditional fuels. In addition, there are administrative costs associated with gaining access to biofuels. These costs impact equally on all players, but they can be more challenging to meet for smaller players. The municipality may therefore grant dispensations in individual cases in order to avoid imposing requirements that are either impossible or disproportionately demanding to meet, provided that the applicant can implement other measures to compensate for the lack of emission reductions.