What we're doing

Congestion pricing interview with BNET 2010

Sep 2010

Congestion pricing is used in a number of cities around the world, such as London and Singapore, but has gained little traction in Australia. In this Interview for BNET, Phil Manners, Senior Economist at the CIE, explores some of the issues surrounding congestion pricing that could see it developed as a practical tool to improve transport in Australian cities

To listen to an interview with Phil Manners on congestion pricing click here

Economic benefits of trade facilitation in the Greater Mekong Subregion

20 Aug 2010

The CIE recently prepared a report on the economic benefits of trade facilitation in the Greater Mekong Subregion (GMS). Commissioned by the Australian Agency for International Development (AusAID) for presentation to the 16th GMS Ministerial Conference in Hanoi, the report discusses the benefits of further progress in trade and transport facilitation for the six countries of the region (Cambodia, China, Lao PDR, Myanmar Thailand, and Vietnam).

The report presents evidence to suggest that integration within the region is playing an important role in the dynamic performance of the Subregion, but that there is scope to expand this role by further reducing the costs of cross-border trade and transport. In most countries there is considerable room for improvement in trade and transport facilitation, and feasible changes could yield significant increases in national incomes. The evidence suggests that complementing infrastructure investments with procedural reforms to reduce costs and delays of cross-border trade could bring about sizeable economic benefits.

View report online [pdf, 347KB]

ABCB Private Bushfires Shelters Consultation RIS release

18 Aug 2010

The Building Code of Australia (BCA) provides nationally consistent, minimum necessary standards for the design and construction of buildings in Australia. The Australian Building Codes Board (ABCB) on behalf of the Australian Government and State and Territory Governments produces and maintains the BCA.

The ABCB commissioned the Centre for International Economics (TheCIE) to develop a consultation RIS to assess selected options for introducing provisions for private bushfire shelters in the BCA. The key finding of the consultation RIS is that while the option of voluntary construction guidelines would likely generate some net benefits above a status quo market outcome, the development of performance requirements – to which all newly constructed private bushfire shelters will be subject – will likely overcome a greater number of market failures involved in both the status quo and under voluntary construction guidelines. The introduction of performance requirements was found to return the highest benefit to the economy of the three implementation options considered. In addition, the consultation RIS finds that the construction of private bushfire shelters should remain a private decision and not mandated through planning laws. Such a requirement of mandatory construction would be likely to only affect those residents with a lower likelihood of using the shelter (through, for example, a preferred strategy of leaving early) increasing the net costs of the proposed provisions.

The consultation RIS is currently available for public comment through ABCB.

To view the report online click here

ABCB Salinity Consultation RIS release

3 Aug 2010

To view the report online click here

Energy efficiency in industry of APEC economies

30 Apr 2010

Reducing GHG emissions is a politically, as well as technically, difficult policy area. A suite of policies is required to reduce GHG emissions, with improved energy efficiency being one of the key tools. In this report, the CIE undertakes a stocktake of the policies, programs and benchmarking activities that APEC member economies are implementing to target energy efficiency in the industrial sector.

This study brings together existing literature on the energy efficiency policies of APEC economies, supplemented and brought up-to-date through a survey of APEC member economies.

The study highlights the point that most policies and programs implemented across APEC are voluntary, with more developed economies using financial incentives to drive behavioural changes, while less developed economies tend to use education and information tools. Few APEC economies have implemented benchmarking activities, reflecting some of the difficulties associated with defining and measuring energy efficiency.

View report online [pdf, 433KB]

Congestion pricing: why and how

15 Apr 2010

Congestion pricing is looking increasingly likely as a tool to both reduce over-crowding of roads and provide a revenue source for governments. In NSW, the 2003 Parry Inquiry recommendations, accepted by the government, were to consider implementing electronic road pricing for congestion within five to 10 years. The Henry tax review, currently being considered by the Australian Government, is also expected to support congestion pricing. Congestion pricing has been implemented in various ways in other countries, such as the UK and Singapore.

In theory congestion prices would change depending on the impact of each person’s journey on other road users. This has many positives, replacing taxes that distort incentives with one that improves them.

In practice, congestion pricing will be more limited, in order to manage the costs of implementation. The nature of its application and the range of other policies used to support it will determine the extent to which congestion pricing achieves its theoretically available benefits.

Congestion pricing has broader implications for public transport, new infrastructure and other government taxes. These would have to be considered as part of its introduction. This note addresses the why and how of congestion pricing and the implications that introducing congestion pricing would have for public transport and for other government taxes.

To listen to an interview with Phil Manners on congestion pricing click here

Phil Manners can be contacted in our Sydney office.

View article online [pdf, 119KB]

Economic modelling for the Australia-India FTA Feasibility Study

6 Apr 2010

A CIE study into the potential economic impacts arising from Australia and India liberalising all bilateral trade and foreign direct investment has recently been released. This substantial project, undertaken for the Australian Department of Foreign Affairs and Trade, saw use of a leading edge CGE model of the global economy — CIE-GCubed — to quantify the macroeconomic and sectoral impacts of Australia and India entering into a comprehensive trade and investment agreement. Barriers to merchandise trade, services trade and foreign direct investment were quantified; with the modelling incorporating the so-called ‘dynamic productivity’ gains arising from increased trade and investment.

The economic modelling suggests that a comprehensive trade and investment agreement could see Australia's GDP being higher by around 0.20 per cent over the longer term, and around 0.15 per cent higher in the case of India. Australia's GDP gains were estimated to amount to some A$43 billion over 2010 to 2030, with India's GDP gains amounting to A$46 billion.

The full Australia-India FTA Feasbility Study can be downloaded from http://www.dfat.gov.au/geo/india/fta-study/index.html

For further information please contact Lee Davis in our Sydney office.

View report on line [pdf, 435KB]

Regulation Impact Statement on illegally logged timber

12 Feb 2010

As part of its election commitments, the Australian Government is looking to develop a regulatory framework to address the environmental, economic and social issues arising from the trade of illegally logged timber. The aim of the proposed framework will be to encourage the sourcing of forest products from sustainable forest practices and to restrict imports to Australia of illegally logged timber and associated products.

The Office of Best Practice Regulation informed the Department of Agriculture Forestry and Fisheries that a Regulation Impact Statement is required to assess the impacts of pursuing two elements of the commitment:

identifying illegally logged timber and restricting its import into Australia
requiring disclosure at point of sale of species, country of origin and any certification.

TheCIE has identified multiple issues associated with developing measures to combat illegal logging, which are summarised in the Issues Paper and the benefits and costs are quantified in the draft Regulation Impact Statement (see press release).

TheCIE final report to the Department can be accessed below, along with the issues paper, the draft Regulation Impact Statement and the responses we have received from interested stakeholders. (The views expressed in submissions are those of the organisations or authors to the submissions - they are not those of TheCIE. TheCIE accepts no responsibility for the contents of these submissions.)

The final report includes some amendments to the draft Regulation Impact Statement. The main changes are the inclusion of a consultation statement (chapter 8), more detail on various estimates of the non-market (social and environmental) costs of illegal logging (appendix C), the addition of a conclusion chapter (chapter 9), and an amended Executive Summary.

For related information on this project see the Department of Agriculture, Fisheries and Forestry's illegal logging page.

View final report online [pdf, 753KB]

View issues paper [pdf, 611KB]

View PDF version of the Draft RIS released 13 October 2009 [pdf, 797KB]

View HTML version of the Draft RIS released 13 October 2009 [htm, 1381KB]

Final Regulation Impact Statement on increased energy efficiency requirements in the Building Code of Australia (BCA 2010)

28 Jan 2010

The Building Code of Australia (BCA) provides nationally consistent, minimum necessary standards for the design and construction of buildings in Australia. The Australian Building Codes Board (ABCB) on behalf of the Australian Government and State and Territory Governments produces and maintains the BCA.

At their meeting of 30 April 2009, the Council of Australian Governments (COAG) reaffirmed its commitment to introducing a comprehensive National Strategy for Energy Efficiency to help households and businesses reduce their energy costs, improve the productivity of the Australian economy and reduce the cost of greenhouse gas abatement under the Carbon Pollution Reduction Scheme (CPRS). As part of this commitment, COAG agreed to increase the energy efficiency requirements of new residential and commercial buildings under the BCA.

The ABCB commissioned the Centre for International Economics (TheCIE) to develop consultation and final RIS’s that assess the costs and benefits of proposed changes to the energy efficiency provisions in the BCA with regards to commercial and residential buildings. The key findings are that (in all probability) the proposed changes would result in net benefits if applied to commercial buildings, but net costs if applied to residential buildings.

Click here to download the Final RIS documents.