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Urban Congestion Charging: Theory, Practice and Environmental Consequences


  • Georgina Santos
  • David Newbery


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.

Suggested Citation

  • Georgina Santos & David Newbery, 2001. "Urban Congestion Charging: Theory, Practice and Environmental Consequences," CESifo Working Paper Series 568, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_568

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    References listed on IDEAS

    1. Santos, G. & Rojey, L. & Newbery, D.M., 2000. "The Environmental Benefits from Road Pricing," Cambridge Working Papers in Economics 0020, Faculty of Economics, University of Cambridge.
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