MARKETS, GOVERNMENT AND ENVIRONMENTAL POLICY ISSUES FOR PUBLIC TRANSIT.

This paper considers the wider transport policy implications of bus deregulation, especially the links with environmental objectives. The major themes are the role of markets in creating opportunities through incentives to innovate which impact positively on the environment without the intervention of government, but which accord with political agendas, defining an appropriate set of goals and performance criteria for urban passenger transport which give credence to environmental sustainability, distinguishing outcome and outputs and structuring the regulator to deliver. We use the experience with mini-buses in Britain to show how markets create environmentally compatible incentives.