Congestion pricing, air pollution, and individual-level behavioral responses | Elisabeth Isaksen
Elisabeth will be discussing the paper Congestion pricing, air pollution, and individual-level behavioral responses.
This paper examines whether differentiating driving costs by time of day and vehicle type help reduce urban air pollution and change behavior towards greener modes of transportation. We take advantage of a congestion charge in Norway that imposed spatial and temporal variation in the costs of driving a high and low-emission vehicle to show that changing economic incentives can help lower driving, improve ambient air quality, and induce adoption of low-emission vehicles. We find that increasing the price of entering the inner city congestion zone during rush hours leads to a substantial decrease in both rush-hour driving and concentrations of NO2. Further, by exploiting a novel dataset that combines the full population of car ownership in Norway with detailed information on individuals, we find that households exposed to the congestion charge on their way to work were more likely to adopt a battery-electric vehicle. We find no effect on the total number of cars, implying that the policy induced a switch from “brown” to “green”. Estimated effects on electric vehicle adoption are substantially larger for high income households, suggesting a strong income gradient in the transition towards low-emission cars.
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