Restraining car traffic in European cities: An emerging role for road pricing

Urban traffic problems are now a key political issue in most European countries; in terms of congestion, road safety, and the environment. The response to date in many cities has been to rely on parking controls, better traffic management, and congestion itself to contain traffic, but increasingly there is a recognition that in the larger cities some form of direct restraint on traffic levels will become necessary as car ownership continues to rise. The paper first assesses a number of nonpricing restraint measures, including restrictions on traffic speed and network capacity, and regulatory controls on access. It then considers what role road pricing might play. Here three objectives are identified, and a number of key factors affecting implementation are discussed, including technology, privacy, equity, and the allocation of revenues. One aspect where there is little empirical evidence concerns likely response of drivers to road charges, and the size of the elasticities. Drawing on experience from a number of toll schemes in Norway, some new evidence on driver response is presented. This paper concludes by summarizing current developments regarding road pricing in different European countries, and assesses the potential of the measure as a demand management tool in the future.