Professor Edgar Morgenroth:

I thank the committee for inviting me to appear before it today. I will talk about a slightly different topic, namely, sustainable transport systems and the impacts of transport infrastructure on regional development in particular. I will outline some of the key findings from my research over recent years. This topic is complicated and doing it justice in a short opening statement is difficult. In order to keep my contribution brief, I will confine my remarks to the research I conducted on behalf of the Department of Transport, Tourism and Sport some years ago; my research on the national planning framework, NPF; and a recently published study that considered the effects of different infrastructures on firm start-ups and foreign direct investment, FDI.

Transport issues, particularly in the context of regional development, are often portrayed as a trade-off between environmental sustainability and accessibility and economic development. Many assertions are made in this respect, such as the common claim that transport investment is concentrated in and around Dublin. However, data up to 2009 show that our total investment in roads was not overly concentrated in Dublin. Almost all parts of the country have benefitted from major roads projects and the midlands region has benefitted most from such projects, given its central location. It is also not true that many places are far from rail infrastructure. Overall accessibility to rail stations is high but what differs significantly is the level of service between stations, which means that having a rail station close by is often of little use as few trains are stopping there. It is also often asserted that rural areas would be harder hit by carbon taxes or other fuel taxes because they do not have good public transport. This, again, is not quite correct. Farmers, for example, have essentially no commute and those commuting to nearby towns face little or no congestion, drive relatively short distances and thus drive at optimal engine operating conditions, with consequent low fuel consumption. However, one group of rural dwellers would be harder hit by additional taxes, namely, long-distance commuters who have few economic connections to rural Ireland.

Importantly, peripherality is difficult to eliminate. Roads improve the drive time for all intermediate points such that relative peripherality is unchanged even with investment. This implies that a singular focus on transport infrastructure investment for regional development is likely to fail. Rather, the focus should be on identifying the key constraints that can be removed and the potential comparative advantage that can be exploited in particular regions.

A priori, transport infrastructure is expected to have a positive effect on regional development but that effect can be reduced by high taxes, low demand, good initial stock of infrastructure, incomplete networks, and increased competition. It is therefore not surprising that the empirical literature shows some mixed results. While on average, studies find a positive return on transport infrastructure investment, the return is often smaller than assumed and spillovers are important at the regional level. Some studies suggest that investment in neighbouring regions can often have a more positive effect on peripheral regions than investment in the region itself. By facilitating greater densities in urban areas, transport infrastructure has been found to generate significant productivity gains.

A recent paper I published investigated the importance of different infrastructures in driving firm start-ups and FDI attraction, which are key in driving economic growth, outside Dublin. The paper shows that broadband infrastructure is more important than any other infrastructure. The effect of broadband on such areas is at least twice that of motorways. Proximity to airports only appears to matter for high-tech foreign firms. Importantly, the analysis shows that the educational attainment of the local labour force is far more important than any infrastructure and that areas with low third level attainment are unlikely to benefit from broadband infrastructure when it comes to new firm formation.

Without significant policy changes, the spatial pattern of economic development in Ireland is likely to involve an increasing concentration of the population and economic activity in the east of the country, but with significant sprawl. The only feasible alternative involves building the scale of second-tier cities such as Cork, Limerick and Galway. It is important to note that scale means a larger population but also increased densities. Simply changing city boundaries achieves nothing. These larger second-tier cities would generate increased levels of economic activity for their wider hinterlands. This is the approach adopted in the national planning framework, which I strongly support. In order to achieve this strategy, significant policy change will be needed in both planning and investment.

Increased scale will only be achieved if housing is built to accommodate that increase, and the urban environment needs to be sufficiently attractive for people to want to live in a higher density environment. High-quality public transport plays an important role in this respect. While people appear to have a preference for residing close to urban areas, individuals do not necessarily prefer central locations. Evidence also indicates that high-skilled workers may be more footloose and willing to tolerate longer commutes and to choose their residential location on the basis of amenities and the quality of housing.

Developing scale and density requires stopping sprawl and one-off housing. While economic activity - that is, where jobs locate - is concentrating, there is increasing sprawl in residential locations, which implies longer commutes. The share of Irish commuters driving to work increased from 45% to 62% between 1981 and 2016, which has put additional pressure on roads infrastructure and contributes to increasing emissions from transport. Putting infrastructure between cities has facilitated that sprawl. Without policy change, the projected patterns imply a significant increase in commuting across regions, particularly to Dublin. Projections I produced suggest an additional 100,000 long-distance commuters into Dublin by 2040 if we do not do something fairly radical.

The strategy of the national planning framework to pursue increased scale will help achieve more balanced regional development. If it is pursued properly - though the national development plan's emphasis on motorways suggests that is not the case - the NPF would also achieve reduced emissions from transport.

However, that requires infrastructure, and particularly public transport infrastructure, to be put in place in the cities, and not between the cities, where it would just facilitate more sprawl. City locations are also those where the congestion takes place, and thus, investment will also benefit the hinterland around the cities by facilitating faster travel to the cities.

I thank the committee and I am happy to take any questions members may have.