ESPON 2.1.1 Territorial Impact of EU Transport and TEN Policies Nils Schneekloth / Roberta Capello

1. ESPON 2.1.1 Territorial Impact of EU Transport and TEN Policies Nils Schneekloth / Roberta Capello ESPON Seminar October 6 Matera,Italy

2. Spatial impact of transport and ICT policies • Transport policies have an impact on the spatial structure of the economy through • affecting costs and times for freight • affecting costs and times for passenger travel • Relevant policies are • infrastructure investments • pricing policies (charging of infrastructure, fuel taxation, taxation of car and truck operation) • regulation/deregulation

3. Spatial impact of transport and ICT policies • ICT policies have an impact on the spatial structure of the economy through • affecting the ICT infrastructure and, hence, ICT supply • affecting adoption capabilities and, hence, ICT demand and the actual use of knowledge and information • affecting locations of the ICT service industry • Relevant policies are • ICT infrastructure policies • education, training and ICT adoption support policies • ICT's service promotion policies

4. CGEurope model structure Main features • Spatial price equilibrium • Final demand represented by utility maximizing household • Production presented by profit maximizing firms • Income-expenditure loop is closed • Production is diversified, with different varieties produced at different locations • Firms and households choose supply sources according to relative prices, which include interregional transfer costs • International trade imposes extra costs on trade due to international and cultural impediments

5. CGEurope model structure How do policies enter ? • Freight cost changes affect prices in respective origins and destinations directly and prices in other locations indirectly • Generalised travel cost changes affect costs of communication between suppliers and customers, which in turn affect returns in the origin and costs in the destination directly and prices in other locations indirectly • Higher output prices, lower input prices or lower costs of business travel of firms translate into higher factor incomes and, hence, higher households‘ utility • Lower consumer goods prices reduce the price index and, hence, increase households‘ utility

6. SASI model structure Change oftravel time, change of travel costs Change of Accessibility Quasiproduction function Change of GDP per capita Change of employment Change of unemployment

7. Summary of transport policy scenarios

8. Outcomes of the TIA • Results by NUTS-3 region • Comparison of „with“ and „without“ for 10 scenarios: • Change of regional welfare, equivalent income measure • Change of GDP per capita • Change of accessibility • Change of employment

15. A1 A2 A3 B1 B2 B3 C1 C2 C3 D EU27+2 0.031 0.250 0.292 0.117 0.174 0.280 0.044 -0.276 -0.342 -0.050 EU15 0.032 0.253 0.296 0.121 0.160 0.269 0.044 -0.284 -0.350 -0.068 CC12 0.030 0.239 0.281 0.069 0.503 0.589 0.042 -0.273 -0.330 0.274 CGEurope: Aggregated Effects by Policy Scenario, Percent of 1997 GDP CGEurope: Correlation of GDP per Capita and Relative Welfare Impact +/++ Weak/strong cohesion effect: disparities are reduced ­ –/–– Weak/strong anti-cohesion effect: disparities are increased –/+ Short term anti-cohesion and long-term cohesion effect 0 Little or no effect

16. SASI model: GDP/capita cohesion effects +/++ Weak/strong cohesion effect: disparities are reduced ­ –/–– Weak/strong anti-cohesion effect: disparities are increased –/+ Short term anti-cohesion and long-term cohesion effect 0 Little or no effect

17. Territorial impact of EU ICTs policies Available results: • maps on • accessibility absolute growth rate • Internet absolute growth rate • pc GDP average annual growth rate (at 2020 in the three scenarios) • cohesion indicators • Lorenz curves • Gini coefficients • maps on differences in pc GDP average annual growth • typologies of regions by ICTs policies impact

18. STIMA model structure Change ofICTs investments Change of ICTs endowment Quasiproduction function Change of GDP per capita Change of absolute GDP Change of virtual accessibility Change in regional disparities

19. Data • Scarce availability of disaggregated territorial data on ICTs • at Nuts 3: no availability • at Nuts 2: EOS Gallup Survey 1999 • survey conducted in households in the 15 Countries of the European Union • data collected through face-to-face interviews • by means of a quantitative questionnaire • on a representative sample in each Member State

20. EOS Gallup sample Country Sampling PlanReal SampleNuts level used for sampling Belgique 2000 1961 NUTS 1 Danmark 2000 2060 NUTS 3 Deutschland 5000 5139 NUTS 1 Ellada 2000 2000 NUTS 2 España 5000 5000 NUTS 2 France 5000 5301 NUTS 1 Ireland 1400 1397 NUTS 3 Italia 5000 5134 NUTS 1 Luxembourg 1000 1009 NUTS 1 Nederland 2000 2037 NUTS 1 Österreich 2000 2000 NUTS 1 Portugal 2000 2138 NUTS 2 Finland 2000 2002 NUTS 2 Sverige 2000 1951 NUTS 2 United Kingdom 5150 5211 NUTS 1 Total 43550 44340

21. Scenario Hypotheses • Scenarios based on hypotheses on regional distribution of EU ICTs investments • among regions • lagging vs advanced • among ICTs policies suggested by eEurope 2002 (DG Information society) • accessibility • internet connections • high-tech employment

22. Distribution of ICTs investments according to different ICTs policies scenarios

23. Forecasting methodology • 2% of average annual ICTs investments in 15 EU member states • estimate of marginal efficiency of investments in accessibility, internet connections and high-tech employment • forecast of pc GDP average annual growth rate in 20 years • cohesion indicators (lorenz curve, gini coefficient)

24. Scenario A: pc GDP average annual growth rate

25. Scenario B: pc GDP average annual growth rate

26. Scenario C: pc GDP average annual growth rate

27. Cohesion indicators

28. Typology of regions by ICTs policies impact

29. Framework for Horizontal Policy Analysis

30. EU/National Policy Interaction Summary

31. Conclusions and Policy recommendations • Transport policies have only small effects compared to macro trends • Large increases in regional accessibility transform into small changes in regional economic activity • Regions in the periphery especially with underdeveloped transport and ICT networks are most positively affected by investments in infrastructure • Past and future transport infrastructure policies show positive impact on cohesion in EU-27 • Uniform pricing policies have a slightly negative impact on cohesion in EU-27 • ICT policies can have a considerable effect on spatial development depending on the way of implementation (balanced vs concentrated) • Transport policies in peripheral regions may weaken agglomeration advantages, whereas ICT policies are supposed to be generally growth enhancing and improve peripheral access to information and communication • Comprehensive transport policy must be a coherent single policy in Europe, not a menu from which each member can pick

32. Further Research • Cross-validation of results of SASI and CGEurope • Refinement of regional production function of SASI model • Inclusion of maritime transport and inland waterway in CGEurope and SASI • Causality analysis of regional production and accessibility • Model refinement of STIMA according to data availability • Model integration of SASI and STIMA • Polycentricity, operational measurement concept • Analysis of overloaded corridors, depending on data availability from external sources • Polycentric connectivity • Qualitative analysis of specific policies