Road pricing

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Road pricing are direct charges levied for the use of roads, including road tolls, distance or time-based fees, congestion charges and charges designed to discourage the use of certain classes of vehicle, fuel sources or more polluting vehicles.^[1][2] These charges may be used primarily for revenue generation, usually for road infrastructure financing, or as a transportation demand management tool to reduce peak hour travel and the associated traffic congestion or other social and environmental negative externalities associated with road travel such as air pollution, greenhouse gas emissions, visual intrusion, noise pollution and road traffic collisions.^[3]

In most countries toll roads, toll bridges and toll tunnels are often used primarily for revenue generation to repay long-term debt issued to finance the toll facility, or to finance capacity expansion, operations, and maintenance of the facility itself, or simply as general tax funds.^[1] Road congestion pricing for entering an urban area, or pollution charges levied on vehicles with higher tailpipe emissions are typical schemes implemented to price externalities. The application of congestion charges is currently limited to a small number of cities and urban roads, and the notable schemes include the Electronic Road Pricing in Singapore, the London congestion charge, the Stockholm congestion tax, the Milan Area C, and high-occupancy toll lanes in the United States.^[4][5] Examples of pollution pricing schemes include the London low emission zone and the discontinued Ecopass in Milan. In some European countries there is a period-based charge for the use of motorways and expressways, based on a vignette or sticker attached to a vehicle, and in a few countries vignettes are required for the use of any road. Mileage-based usage fees (MBUF) or distance-based charging has been implemented for heavy vehicles based on truck weight and distance traveled in New Zealand (called RUC), Switzerland (LSVA), Germany (LKW-Maut), Austria (Go-Maut), Czech Republic, Slovakia, Poland, and in four U.S. states: Oregon, New York, Kentucky, and New Mexico.^[6]

Many recent road pricing schemes have proved controversial, with a number of high-profile schemes in the US and the UK being cancelled, delayed, or scaled back in response to opposition and protest. The tendency seems to reverse, however, when the system is already in place, with the popularity of existing systems often increasing while merely discussed systems face an uphill battle in public opinion. A 2006 survey of the economic literature on the subject finds that most economists agree that some form of road pricing to reduce congestion is economically viable and overall beneficial, although there is disagreement on what form road pricing should take. Economists disagree over how to set tolls, how to cover common costs, and what to do with any "excess" revenues (i.e., Revenues that exceed direct costs of road construction and maintenance, but which may still not cover external costs fully), whether and how "losers" from tolling previously free roads should be compensated, and whether to privatize highways.^[7]