Urban Congestion Charging: Theory, Practice and Environmental Consequences

20 Pages Posted: 14 Oct 2001

See all articles by Georgina Santos

Georgina Santos

University of Cambridge - Department of Applied Economics

David M. G. Newbery

University of Cambridge - Department of Applied Economics; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute)

Date Written: September 2001

Abstract

The theory of road pricing developed for single links suggests time and location varying charges equal to the marginal congestion cost at the efficient level of traffic. The second-best network counterpart is derived, but would be infeasible to implement. Cordon tolls are feasible, and their optimal level computed for eight towns. A cost-benefit study showed that with a suitable choice of location, all schemes were socially profitable, though with wide variations across towns. The environmental benefits of cordon tolls are measured and shown to correlate with optimal congestion tolls, but to be modest in size and not to affect the optimal toll.

Keywords: Road Traffic Congestion, Road Pricing, Congestion Charging, Cordon Tolls, Environmental Taxes

JEL Classification: R41, R48, Q28, H23

Suggested Citation

Santos, Georgina and Newbery, David M. G., Urban Congestion Charging: Theory, Practice and Environmental Consequences (September 2001). Available at SSRN: https://ssrn.com/abstract=284156

Georgina Santos

University of Cambridge - Department of Applied Economics ( email )

Sidgwick Avenue
Cambridge, CB3 9DE
United Kingdom
+44 1223 335 284 (Phone)
+44 1223 335 299 (Fax)

David M. G. Newbery (Contact Author)

University of Cambridge - Department of Applied Economics ( email )

Sidgwick Avenue
Cambridge, CB3 9DE
United Kingdom
+44 1223 335 246 (Phone)
+44 1223 335 299 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom
+44 1223 335 246/7 (Phone)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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