Mitigating congestion in urban areas: Urban tolls versus low emission zones

Mitigating congestion in urban areas: Urban tolls versus low emission zones

Fecha: octubre 2020

Valeria Bernardo,  Xavier Fageda, Ricardo Flores-Fillol

Pollution, Congestion, Low emission zones, Urban tolls, Urban areas

Papeles de Energía, N.º 10 (octubre 2020)

The intensive use of private transportation in urban areas generates congestion and pollution, two externalities that are clearly related as prolonged car circulation at reduced speeds has a notable effect on the emission of polluting substances. This paper compares the effectiveness of low emission zones (LEZ) and urban tolls in mitigating congestion for a sample of European urban areas over the period 2008-2019. Our main finding consists in showing that urban tolls are more effective than LEZ in reducing congestion. An explanation could come from the fact that tolls are usually accompanied by public transportation improvements. Furthermore, LEZ may spur the renewal of the car fleet, so that older and more polluting cars are replaced by new and cleaner cars. Hence, LEZ may only have a short-term effect in terms of reducing congestion. Finally, LEZ cities are relatively rich so that their inhabitants may be financially capable of renewing their vehicles to overcome the restriction imposed by this policy. Even though urban tolls are more effective in reducing congestion than LEZ, we observe that tolls are rarely implemented whereas LEZ are increasingly adopted in many European cities. The ultimate reason explaining this policy choice has to do with the fact that LEZ are much better accepted that urban tolls. We also provide some guidelines to better understand this phenomenon.

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