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Air Pollution Dynamics and the Need for Temporally Differentiated Road Pricing

  • Coria, Jessica

    ()

    (Department of Economics, School of Business, Economics and Law, Göteborg University)

  • Bonilla, Jorge

    ()

    (Department of Economics, School of Business, Economics and Law, Göteborg University)

  • Grundström, Maria

    ()

    (Dept of Biological and Environmental Sciences)

  • Pleijel, Håkan

    ()

    (Dept of Biological and Environmental Sciences)

In this paper we investigate the effects of the temporal variation of pollution dispersion, traffic flows and vehicular emissions on pollution concentration and illustrate the need for temporally differentiated road pricing through an application to the case of the congestion charge in Stockholm, Sweden. By accounting explicitly for the role of pollution dispersion on optimal road pricing, we allow for a more comprehensive view of the economy-ecology interactions at stake, showing that price differentiation is an optimal response to the physical environment. Most congestion charges in place incorporate price bans to mitigate congestion. Our analysis indicates that, to ensure compliance with air quality standards, such price variations should also be a response to limited pollution dispersion.

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File URL: http://hdl.handle.net/2077/34150
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Paper provided by University of Gothenburg, Department of Economics in its series Working Papers in Economics with number 572.

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Length: 26 pages
Date of creation: 09 Oct 2013
Date of revision:
Handle: RePEc:hhs:gunwpe:0572
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Department of Economics, School of Business, Economics and Law, University of Gothenburg, Box 640, SE 405 30 GÖTEBORG, Sweden

Phone: 031-773 10 00
Web page: http://www.handels.gu.se/econ/

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