Road Pricing with Green Vehicle Exemptions: Theory and Evidence

J Peter Nilsson, Matthew Tarduno and Sebastian Tebbe

No 18955, CEPR Discussion Papers from C.E.P.R. Discussion Papers

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.

JEL-codes: Q52 R48 (search for similar items in EconPapers)
Date: 2024-03
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Working Paper: Road Pricing with Green Vehicle Exemptions: Theory and Evidence (2024)
Working Paper: Road Pricing with Green Vehicle Exemptions: Theory and Evidence (2024)
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