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Road Pricing with Green Vehicle Exemptions: Theory and Evidence

Author

Listed:
  • Nilsson, Peter

    (Institute for International Economic Studies & Linnaeus University)

  • Tarduno, Matthew

    (University of Illinois at Chicago)

  • Tebbe, Sebastian

    (School of Global Policy and Strategy, University of California San Diego)

Abstract

We provide a framework for setting congestion charges that reflect emission and congestion externalities and policy responses, such as vehicle ownership, driving, and residential sorting. Using Swedish administrative microdata, we identify these responses by exploiting a temporary exemption for alternative fuel vehicles and variation in individuals’ exposure to congestion charges. We find that commuters respond by adopting exempted alternative fuel vehicles, shifting trips away from fossil fuel toward alternative fuel vehicles, and changing where they live and work. We combine the estimated responses with the framework to recover an optimal congestion charge of €9.46 per crossing in Stockholm.

Suggested Citation

  • Nilsson, Peter & Tarduno, Matthew & Tebbe, Sebastian, 2024. "Road Pricing with Green Vehicle Exemptions: Theory and Evidence," Working Papers in Economics and Statistics 7/2024, Linnaeus University, School of Business and Economics, Department of Economics and Statistics.
  • Handle: RePEc:hhs:vxesta:2024_007
    as

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    References listed on IDEAS

    as
    1. Janet Currie & Reed Walker, 2011. "Traffic Congestion and Infant Health: Evidence from E-ZPass," American Economic Journal: Applied Economics, American Economic Association, vol. 3(1), pages 65-90, January.
    2. James Archsmith & Anthony Heyes & Soodeh Saberian, 2018. "Air Quality and Error Quantity: Pollution and Performance in a High-Skilled, Quality-Focused Occupation," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 5(4), pages 827-863.
    3. Stephen P. Holland & Erin T. Mansur & Nicholas Z. Muller & Andrew J. Yates, 2016. "Are There Environmental Benefits from Driving Electric Vehicles? The Importance of Local Factors," American Economic Review, American Economic Association, vol. 106(12), pages 3700-3729, December.
    4. Michael L Anderson, 2020. "As the Wind Blows: The Effects of Long-Term Exposure to Air Pollution on Mortality," Journal of the European Economic Association, European Economic Association, vol. 18(4), pages 1886-1927.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    congestion pricing;

    JEL classification:

    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

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