Tradable Credits for Congestion Management: support/reject?

Abstract

Dozens of variants for congestion charging have been studied and discussed in scientific and political circles in the search for an efficient policy to abate the negative effects of car use, these being congestion and emissions, in particular. Although congestion charging provides clear economic advantages and is technically possible, the actual implementation of these schemes is rare. Proposals for charging schemes typically stir up public opposition, which negatively influences political support and overall feasibility. Reoccurring arguments in the public debate include people’s disbelief in the scheme’s effectiveness, conviction that it is ‘yet another revenue stream for the government’, fear that it will treat them or others unfairly, and car users, especially, expect that it will (financially) disadvantage them. The concept of tradable peak credits (TPC) is a drastically different alternative that can potentially address these concerns and hence become a more feasible policy instrument. This concept is based on the cap-and-trade principle and is, in theory, very effective since it puts a firm ‘limit’ on road access during peak hours. Access rights - the credits - are distributed among people who can use them to access the road or trade them via an online market where the credit price is set by supply and demand. Thus, money flow stays within the group of users and does not flow towards the government. Since the credit distribution does not affect the scheme’s efficiency, the operator (government) can distribute the credits in any way to meet equity concerns. The main reason for the recent upsurge in literature on tradable credits in transportation research lies in the notion that support from the public in general, and of car users in particular, might be higher than it is for a congestion charge. Studies on theoretical explorations, scheme design, effects on traffic flow and behavioural effects have expanded in the last decade, but empirical studies on public support has remained remarkably scarce. A few empirical studies on related concepts in mobility management have been conducted, but these typically study support for a fixed scheme design, whereas support may heavily depend on the scheme design, for example on the credit distribution. Furthermore, public support for road pricing is often studied in a quantitative way and analysed on an aggregated level. However, the public debate about road pricing is full of varying arguments, which indicates that the public is very heterogeneous in their opinion and preferences. To better understand how (novel) road pricing can be designed and implemented, this thesis therefore also focuses on the underlying arguments and the differences between (groups of) people. Lastly, a broader view on the feasibility of TPC with insights from fields other than transportation economics also seems to be missing. Hence, the main aim of this study is to increase the understanding of the feasibility - and in particular public support - of Tradable Peak Credits (TPC) as a policy instrument for congestion management...