The Gothenburg congestion charges: cost–benefit analysis and distribution effects

Abstract

This paper performs an ex-post cost-benefit and distribution analysis of the Gothenburg congestion charges introduced in 2013, based on observed effects and an ex-post evaluated transport model. Although Gothenburg is a small city with congestion limited to the highway junctions, the congestion charge scheme is socially beneficial, generating a net surplus of €20 million per year. From a financial perspective, the investment cost was repaid in slightly more than a year and, from a social surplus perspective, is repaid in\ 4 years. Still, the sums that are redistributed in Gothenburg are substantially larger than the net benefit. In the distribution analysis we develop an alternative welfare rule, where the utility is translated to money by dividing the utility by the average marginal utility of money, thereby avoiding putting a higher weight on high-income people. The alternative welfare rule shows larger redistribution effects, because paying charges is more painful for low-income classes due to the higher marginal utility of money. Low-income citizens pay a larger share of their income because all income classes are highly car dependent in Gothenburg and workers in the highest income class have considerably higher access to company cars for private trips. No correlation was found between voting pattern and gains, losses or net gain.

Near-Source Risk Functions for Particulate Matter Are Critical When Assessing the Health Benefits of Local Abatement Strategies

“…In Gothenburg a similar cordon-based congestion charge was introduced in 2013. The observed traffic reduction across the cordon was 10% on average [ 16 ]. For simplicity, the effect of the congestion taxes is represented by an overall reduction in traffic flow within the modelling areas of 21% and 10% for Stockholm and Gothenburg, respectively.…”

Policies for Internalizing Externalities from Car Transport in Two Swedish Cities

“…Eliasson (2016) found that low-income earners pay a substantially larger share of their income in congestion charges in Gothenburg than in Stockholm. West and Börjesson (2020) showed that net social benefits were positive, although redistribution from car users to the government was considerably larger than the net benefit. The welfare effects of this redistribution were found to be regressive.…”

Distributional effects of urban transport policies to discourage car use

“…86 Policy levers are often distributed across multiple levels of government. Overall, the political process can be Eliasson and Hamilton, 2016[227]; West and Borjesson, 2020 [178]), Milan (Ozer, Beria and Pacchi, 2012 [245]), Norway (Tretvik, 2003[237]; Odeck and Kjerkreit, 2010 [246]); Edinburgh (Gaunt, Rye and Allen, 2007 [259]), The Netherlands (Ubbels and Verhoef, 2006 [236]), The Canary Islands (Grisolía, López and de Dios Ortúzar, 2015 [255]), the United States (Harrington, Krupnick and Alberini, 2001[253]; Zmud, 2008[232]), Sydney (Hensher and Li, 2013[35]) and Taiwan (Jou, Lam and Wuvs, 2007[249]). 85 De Borger and Proost (2012 [277]) show that the ex-ante opposition to tolls can be explained by uncertainties on (i) the availability of alternatives to driving and (ii) the use of toll revenue.…”