The use of road user charges has increased in Europe. Charges have been imposed in order to finance road management and/or to regulate demand. At the same time, practical experience has provided information about the impacts of road pricing. The objective of this study is to prepare a concise and easy-to-read survey of the impacts of road pricing. Objectives, impacts on equity, and acceptability of road pricing have also been addressed because these questions are connected to the impacts of pricing.
In addition to conducting a survey of the literature, the working method included the application of the causal chain method. The impacts of road pricing are presented graphically as causal chains which proceed from state changes caused by pricing (e.g. a change in kilometer costs) to impacts on the welfare of road users or the rest of society (e.g. the habitability of residential areas or the availability of labour). Some of the causal chains are very straightforward, while others are very complicated. The study does not, however, present estimates of the magnitudes of impacts; impacts are instead illustrated using a set of practical examples.
The two primary objectives of road pricing are usually to finance road management and/or regulate demand for road traffic. In those cases where financing is the main objective, an attempt is made to set fees in such a way that income targets are met. The regulation of road traffic is effective when road users pay all the costs they generate, including externalities (the costs of congestion, emissions, and noise to other parties; accidents causing damage and injury to other parties).
The lack of funding for road construction, maintenance, and operation has led to the more widespread use of road user charges in Europe. Pricing can focus on individual links (toll roads) or parts of the network (e.g. user charges on highways in Germany and Austria). On toll roads, charges are collected from all vehicles. However, when only parts of the road network are priced, pricing is usually restricted to heavy goods vehicles. In the latter case, vehicles that cause greater pollution can be charged higher fees in order to reduce emissions.
In addition to the need for funding, road pricing is an effective way of regulating demand for road traffic in congested urban areas. A reduction in demand for traffic results in time savings for road users and increased predictability of travel times. A reduction in traffic also improves the habitability of the urban environment and reduces urban sprawl. On the other hand, the higher price of the travelled route forces a proportion of users to switch to a different means of transportation or to forego making the trip altogether. The congestion fees in Stockholm and London are good examples of successful demand regulation. However, the congestion charges are only one part of a larger package as a substantial amount of funding is also allocated to the promotion of public transport.
Distance-based network charges and cordon tolls are the most effective ways of producing the desired regulatory effects. In the case of distance-based charges, the level of the fee collected per kilometre can be set according to a certain factor such as the size of the vehicle, the emissions produced, or the time of day the trip is made. The same applies to cordon tolls around cities. In this case, however, the most important factor affecting the level of the costs generated is the time of day the trip is made. Thus, a higher fee is charged during congested times of day.
It is often claimed that road pricing simply improves the position of the well-off and worsens the position of the less well-off. However, studies on this issue have produced conflicting results and show that road pricing can be either regressive or progressive. Impacts on equity vary from case to case, and the targeting of impacts should be carefully evaluated at the planning stage.
Road users usually oppose road pricing because it is felt to be an additional cost burden on top of the taxes they are already paying. Businesses also usually oppose road pricing because it means higher transportation costs, which can prevent some customers from conducting business, in consequence of which they do not buy goods and services, and demand drops. The opinions of political decision-makers often reflect the opinions of citizens and businesses, but politicians also see road user charges as an attractive funding method. The pricing systems that have been implemented have shown, however, that the acceptability of road pricing usually increases after it has been introduced. The reason for this is that citizens experience the direct benefits of pricing first hand or benefit from subsequent investments that were made possible by the income generated by the charges.