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Projects Physical Aspects

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Spearhead: Climate, energy and environment

Cost-effective climate policy
The EU has unveiled an ambitious climate strategy, with targets to reduce the emissions of greenhouse gases by 20% by 2020. In the Netherlands climate policy is also high on the agenda, for instance in the form of a proposal to further tighten energy conservation targets. CPB wants to conduct a survey study into the cost-effectiveness of climate policy. The policy scope for the Netherlands versus the EU and the possible choices at national level will take centre stage here. Attention will be paid to various measures to reduce greenhouse gases, such as renewable energy development, CO2 sequestration and energy conservation. More institutional issues will also be considered in this study. As will the relationship to targets surrounding renewable energy generation.
Furthermore, the Court of Audit has asked CPB to sit on the advisory committee for its investigation into the effectiveness and efficiency of the renewable electricity consumption subsidies disbursed under the Environmental Quality of Electricity Generation Act (MEP). The outcomes of this research will, it is expected, play a major role in the formulation of future Dutch energy policy. CPB is also represented in the ad hoc Future Energy Supply Commission. In 2007 this body will consider the role of nuclear energy in the future energy household.
The planned activities will contribute to the accumulation of knowledge on energy and climate within the sector. The elaboration of the work plan will be based in part on discussions with the Ministry of Economic Affairs / DG Energy, and other organisations active in the energy sphere, such as the Netherlands Energy Research Centre (ECN).

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Adaptation to climate change
Within the framework of the "Climate changes Spatial Planning" ("Klimaat voor Ruimte") programme, CPB, the Netherlands Institute for Spatial Research (RPB) and the Netherlands Environmental Assessment Agency (MNP) will elaborate the prosperity and quality of life (WLO) scenarios for a scenario study into the scope for preventing and adapting to the expected climate changes. Water security is another item on this agenda. This theme has become much more topical since the flooding of New Orleans. In the Netherlands the public debate on safety standards should culminate in some conclusions in 2008. The "Safety in Perspective" project has been started in this context. Within this framework the model for optimum safety standards developed by the HKV consultancy for the cost/benefit analysis on "Room for Rivers" ("Ruimte voor de Rivier") programme will be modified to make it usable for others as well. CPB sits on the advisory committee. CPB is also involved in the debate on the problem of insurance against flood damage. Furthermore, as a follow-up to the "Subsidiarity in Europe" conference, the Physical Aspects sector will conduct a study, together with the International Economic Trends sector, into the various environmental directives from the perspective of subsidiarity.

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Spearhead: Housing market

Functioning of the rented accommodation market
This CPB-wide study into the housing market is aimed primarily at the rental market. As a follow-up to the study on the change to the tax regime governing owner-occupied homes on the one hand and previous work on the validation of analyses by the ABF consultancy on the new rented accommodation policy on the other hand, this project will conduct research, in cooperation with other sectors, into the market for rented accommodation. This will lead eventually (but not in 2007) to a comprehensive review of the housing market, including the relationship between the for-rent and to-buy markets.
The key question in this context is how existing government intervention on the rental market can be redirected towards a more efficient support of the target groups (bearing in mind any political considerations which may play a role here). Current practice shows that substantial numbers of renters do not pay a price which reflects the quality of their home. This leads to distortions, which in turn may lead to lower housing market mobility, poorer housing consumption decisions and an inequitable distribution of housing space among the target groups. The study will examine several research issues: (i) How would a rental market function without government policy, what market failures would occur in such a market, and which policies would be most suitable to overcome these market failures (Greenfield analysis)?; (ii) How does the Dutch rental market currently function from a prosperity perspective?; (iii) What can we learn from experiences in other countries?; (iv) Through which transition paths can the Dutch rental market be improved? Other aspects which will be considered in this study are the role of the housing associations, housing market effects (such as interaction with the to-buy market), income effects, purchasing power effects, prosperity effects and optimum tax regimes.
The research is being conducted in cooperation with the Competition and Regulation sector. Other sectors which also make a contribution are Labour Market and Welfare State (provision-of-goods approach) and Short-Term Analysis and Fiscal Affairs (income and wealth effects).

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Spearhead: Agglomeration effects, infrastructure and subsidiarity

Agglomeration effects of infrastructure projects and territorial administration
The research into the nature, magnitude and extent of agglomeration effects will start with a study which will analyse, on the basis of literature research, how agglomeration effects emerge, what markets are affected by them, and how these indirect effects relate to and may be separated from direct effects. The idea is that the agglomeration effects of infrastructure projects are reflected in land prices, among other factors. Empirical analysis of land prices (probably by means of house prices) can give indications of the prosperity effects of infrastructure or spatial planning. To gain a better general understanding of these matters, it would be useful to build small conceptual general equilibrium models. One route is through urban models and land market models. A start was made in 2006 with a stylised example of land use changes in relation to the Zuidas project (a new commercial centre in Amsterdam). Other aspects can be added to this. Another approach is the regional models with agglomeration effects and not fully flexible labour markets. A start has been made here as well by studying the prototype of a regional general equilibrium model developed by Bröcker. For this project we will explore the possibilities of cooperating with the Netherlands Institute for Spatial Research (RPB), for instance in the empirical study of land prices.

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Subsidiarity
The analysis of the relationship between tiers of government will be the subject of a literature study in the first instance. Then we will decide which of the two following case studies will be taken up in 2007.

a. Organisation of road maintenance
Following on from a study by the Competition and Regulation sector to be completed in December 2006 on the strengths and weaknesses of private maintenance of roads on the basis of the criteria of market failure and government failure, the Physical Aspects sector will conduct a study into the organisation of road maintenance in the Netherlands. (The work of the Nouwen Commission is also very relevant in this context.) This issue is closely linked to road pricing policy. The government is regarded in this context as an administrative unit. This theme is developed further by focusing on the division of labour between the tiers of government:

  • What is the optimum division of responsibilities between the tiers of government (i.e. central government, provinces, urban regions and municipalities) for infrastructure construction, infrastructure maintenance, traffic management and, in the case of road pricing, charge setting? Who pays what?
  • How does private management of parts of the network fit into this division of responsibilities between the tiers of government? What tier of government commissions the work and sets the framework conditions?
  • CPB has committed itself to making a contribution to the Mainport Corridor South project (aimed at improving transport links between Rotterdam and Antwerp). It is too early to say how this project will be taken forward, whether as an innovative public-private partnership or as a standard expansion of road infrastructure. If the latter, our role may be limited to providing a brief second opinion. If the former, we may well conduct a more detailed study ourselves.

    b. Role of central government in urban renewal
    Urban renewal is a major policy task for the central government in the future. However, does a contribution by central government makes sense? After all, the benefits are primarily felt at the local level. Should the incentives perhaps be reconsidered? What does this imply for the current financing system for the lower-tier authorities? This question also arises regularly in the context of project assessments for the Interdepartmental Committee on the Spatial Economy (ICRE). The challenge is to be able to say more on these issues.

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    Spatial planning

    Methodology development on the implications of spatial planning policies
    At the moment the sector is working with the Free University of Amsterdam on the development of methods for charting the effects of spatial planning policies. For the time being this will result in scientific articles. But after 2007 these will have to be followed up with policy analyses. What can be said about dispersed development and concentrated development at expansion locations at some distance from where the housing demand exists? This could then give shape to a broad approach to the land market within the sector.

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    Road pricing policy and home/work location choices
    Road pricing is the most important issue in the mobility sphere in the coming years. CPB has already made some telling contributions in this area in recent years, in particular a very detailed cost/benefit analysis of different forms of road pricing for the Nouwen Commission. It seems worth making this relatively abstract analysis more concrete in several respects. In particular, the fact that the government has opted for a national system of road pricing - unique in the world - raises a number of questions. What is the ex ante effect of the various forms of road pricing on spatial planning? This could be measured from the ex ante effect on accessibility, where "accessibility" is understood to mean the inverse of generalised travel costs. Which locations will become more attractive to live in (Weesp?, Delft?), which less attractive (Almere?, Enschede?). Which locations will become more attractive as businesses locations(Amsterdam?), which less attractive (Groningen?). This project could be executed in cooperation with the Knowledge Centre for Mobility Policy (KiM), the Netherlands Institute for Spatial Research (RPB) and the Transport Research Centre (AVV).

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    Model development

    RAM: a regional labour market model
    In early 2007 a publication on the Regional Labour Market Model (RAM) will be completed, which will include a substantiation of the regional elaboration of the prosperity and quality of life (WLO) scenarios. This will probably require some aftercare (presentations, articles etc). Some model maintenance will also be required, and the institutional embedding of the RAM deserves attention, not least because the model provides input for the Business Location Monitor (Bedrijfslocatiemonitor). Responsibility for this initiative has been transferred to the Netherlands Institute for Spatial Research (RPB). That is why consultations with the RPB are planned on this aspect.