The Role of Tradable Credit Schemes in Road Traffic Congestion Management

Abstract

Road traffic congestion is not yet reflected in current market prices within the sector and has given rise to a number of instruments to mitigate the resulting negative impacts. The focus of this paper is the tradable credit scheme — an incentive-based economic measure — in order to address traffic congestion. The research questions are (1) whether the state-of-the-art in the literature suggests that tradable credit schemes could be feasibly introduced to mitigate congestion, and (2) whether a tradable credit scheme could have advantages over other instruments. A brief outline of congestion mitigation approaches is provided first to position this type of economic instrument with respect to other measures. The broad issues in the design of a tradable credit scheme are then presented. Most research to date has focused on the use of tradable credits to manage related pollution, but it is clear there is potential to design a scheme for traffic congestion management. To date this is a novel review of tradable credit schemes that has focused specifically on their role in road traffic congestion management.

Keywords:

• tradable credits
• road traffic congestion
• congestion costs
• congestion mitigation
• bottleneck modeling
• economic incentives

Acknowledgements

We are grateful to three anonymous reviewers for their valuable feedback and also Dr Zia Wadud, Dr Astrid Guehnemann (ITS, Leeds), and Dr. Dick Ettema (Department of Human Geography and Planning of Utrecht University) for their helpful input. The study is supported by the EU Marie Curie IIF (MOPED, 300674), National Natural Science Foundation of China (71361130016), the National Basic Research Program of China (2012CB725401), the Program for New Century Excellent Talents in University of China (NCET-11-0695), and the Fundamental Research Funds for the Central Universities (nos. 2013JBM044 and 2012JBZ005). The content is solely the responsibility of the authors and does not necessarily represent the views of the funding sources.