BICEPS participates in the international ERA-NET project “City Tolls That Work” (2023-2025)

BICEPS, in cooperation with partners from Vienna University of Economics and Business, IT-company Dolphin Technologies (Austria) and Swedish National Road and Transport Research Institute, has successfully applied for the ERA-NET Cofund Urban Accessibility and Connectivity (ENUAC) third call titled “Innovations for Managing Sustainable Urban Accessibility”. The funding agencies from participating countries agreed to support our proposed research project “City Tolls That Works”. The respective local funding agency for this grant is the Latvian Council of Science.

The project aims to identify ways to improve public attitude toward road congestion tolls in cities. Most economists recognize city tolls as an effective policy measure to fight traffic jams and decrease the negative environmental impacts of car traffic in cities. However, unlike paid car parking, a transport policy measure that is present in almost every urban area in Europe, city tolls tend to face strong public backlash. Singapore, London, Milan, Stockholm and Gothenburg are noticeable exceptions of cities with working road congestion pricing. Public acceptability of the pricing mechanism is low mainly due to concerns that tolls lack fairness, affecting some population groups more negatively than others. Such public resistance makes the idea of city tolls de facto non-operational – there was no progress in the introduction of road congestion tolls in European cities over the past decade. This motivates our search for road tolling schemes that can really work in cities, i.e., that make cities more accessible and sustainable, while also being perceived as fair and having broad public support.

To succeed, one first needs to gain a solid understanding of what population groups actually benefit and lose under existing city tolls and why. Project’s Swedish partner will use unique real-world congestion pricing and registry data of the full Swedish population to acquire new insights on long-term distributional effects of city tolls. These will inform our project further, as BICEPS will propose and measure public support in Riga and Vienna (together with the Austrian partners) for innovative road-pricing schemes, including one with a cash-back component, in which collected tolls are returned directly back to drivers in the form of public transport tokens. BICEPS will then support Austrian partners that will design and implement a field experiment in Vienna that measures behavioral reactions to such novel pricing instruments.

The research consortium is led by Vienna University of Economics and Business. The project period runs from April 2023 until October 2025. Sergejs Gubins is BICEPS senior researcher associated with the project.