Environmental effects of fixed and variable transport-related charges in Russia

Abstract

Today, transport-related charges hold an important place in practically all national tax systems. They constantly updated to stay in line with the goals of "green policy". Such charges are becoming a mechanism of price regulation that forces car users to change their consumption patterns. The purpose of this article is to study the impacts that the existing structure of transport-related charges has on the environment and propose measures for making them more environmentally-focused. Transport-related charges were classified either as fixed or variable depending on whether the size of the charge is in proportion to the intensity of car use. The environmental impact of transport-related charges was identified through analysis of the functions that each levy performs. The analysis conducted in the study proved that Russia practically lacks regulation targeting the behavior of producers and consumers of motor vehicles and fuel. The existing system of transport related charges is revenue-focused, i.e., it satisfactorily performs only its fiscal function. At the same time, the regulatory potential function of transport-related charges in Russia remains practically untapped. The system of transport-related charges in Russia is dominated by fixed charges, the amount of which does not depend on the intensity of car use. Variable transport-related charges in Russia are fewer in number, so they cannot serve as a driver for behavior change towards sustained environmentally friendly habits in car owners. The article outlines a set of proposals for making some fixed transport-related charges in Russia more environmentally-focused and for increasing the environmental benefits of variable transport-related charges. © Published under licence by IOP Publishing Ltd.