Implementing Pricing Schemes to Meet a Variety of Transportation Goals

Jenn, Alan · 2019 · ROSA P / University of California, Davis. Institute of Transportation Studies

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Summary

This report addresses the growing need to price transportation externalities—specifically road damage, vehicular emissions, and congestion—as traditional gasoline taxes become structurally deficient due to inflation, improved fuel efficiency, and the adoption of electric vehicles. The study reviews academic literature and examines real-world case studies to evaluate design choices for pricing programs targeting these three externalities. It highlights that while gasoline taxes have historically served as a catch-all funding mechanism, they are politically contentious and increasingly inadequate for infrastructure financing. The research investigates alternative mechanisms, including mileage-based road user charges (RUC), congestion pricing, and environmental fees, with a focus on implementation technologies and policy design. The methodology involves a comprehensive review of existing academic literature and an analysis of implemented pricing schemes globally. The report details specific case studies, including RUC pilots in Oregon, California, and Minnesota; heavy-vehicle RUC systems in New Zealand and several European countries; and congestion pricing implementations in Singapore, Stockholm, Gothenburg, London, and Milan. It also examines environmental restrictions in Beijing and Milan. The analysis compares data collection methods, such as on-board diagnostics, GPS, smartphone apps, manual odometer reporting, and automatic number plate recognition, alongside payment structures and administrative costs. Key findings indicate that while public opposition to new pricing schemes is often high, pilot participants generally report positive perceptions when privacy concerns are addressed and systems are cost-effective. The report notes that RUC programs, such as Oregon’s OReGO, face high initial implementation costs compared to fuel taxes, though costs decrease at scale. Congestion pricing has proven effective in reducing traffic and emissions, as seen in Stockholm and London, though implementation costs vary significantly based on technology, ranging from low-cost manual checks in early Singapore schemes to high-cost electronic systems. The study identifies that exemptions and revenue recycling strategies can mitigate equity concerns and political resistance. Crucially, the analysis reveals significant opportunities for integrating technology across multiple pricing programs. By relying on overlapping systems for data collection and payment, jurisdictions can implement multiple pricing schemes more efficiently, achieving tremendous cost savings. The significance of this work lies in its practical guidance for policymakers transitioning away from static fuel taxes. It demonstrates that while pricing externalities is politically challenging, it is technically feasible and financially viable when designed with equity and efficiency in mind. The report concludes that integrating technologies across congestion, mileage, and environmental fees can streamline administration and reduce costs, providing a roadmap for future transportation funding and demand management strategies. This approach supports the broader goals of sustainable transportation infrastructure funding and the reduction of negative externalities associated with vehicle use.

Key finding

Integrating technology across multiple pricing programs allows for overlapping systems that provide tremendous cost savings and more efficient implementation.

Methodology

review

Provenance

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