Travel Responses to Alternative Highway Pricing and Financing Strategies and their Impact on Fuel Consumption and Greenhouse Gas Emissions

Focus Area



Air Quality







Research Idea Scope

TERI Administrator Note (May 2013). Completed in 2011 as NCHRP Report 686 Road Pricing: Public Perceptions and Program Development

The proposed research would be conducted in several steps:

1. Identify external costs of highway transportation that are sensitive to changes in the level of vehicle-miles traveled and select the best available estimates of their magnitude and reasonable range from the available literature.

2. Identify traveler-paid costs that vary with mileage traveled but are commonly paid in fixed increments because of institutional arrangements, custom, or other reasons, and estimate their per-mile values.

3. Identify the structure and level of taxes currently used to finance transportation infrastructure investments, highway maintenance, and road system administration, including motor fuel, taxes, vehicle registration fees, local property taxes, etc.

4. Identify alternative pricing structures for (1) each component of costs now covered by motor fuel or other transportation-related taxes, (2) each motorist-borne cost component now paid in fixed increments, and (3) each empirically significant external cost element associated with highway travel. One of the alternatives should represent an attempt to maximize the social welfare of the highway transport system by economically efficient pricing.

5. Use available behavioral theories and empirical evidence (e.g., price elasticities) to
develop a consistent analytic framework for predicting potential behavioral changes in response
to the replacement of existing fuel and other transportation taxes and fees with alternative charge
structures based on “internalizing” external costs of highway travel and converting fixed vehicle
and driving-related expenses to a per-mile or other variable basis. Behavioral changes of interest
should include household vehicle ownership levels and vehicle type choices, household-level or
fleet-wide average vehicle utilization and total vehicle-miles traveled, vehicle and fleet fuel
economy, trip characteristics (frequency, timing, length, etc.), density of development, motor
fuel consumption, and emissions of National Ambient Air Quality Standards criteria pollutants,
and greenhouse gases.

6. Assess the willingness of the public to accept new pricing systems and technologies
(vehicle based and nonvehicle based) and the perceived privacy issues.

Urgency and Payoff

An extensive body of recent research shows that the current pattern of highway travel imposes large costs such as congestion and vehicle emissions that are not borne by the motorists who impose them. It also demonstrates that many of the costs of highway travel that are borne by individual users, such as those for vehicle ownership, parking, and insurance, are paid in fixed increments, even though they may arise as a function of individual trips or vehicle mileage. There remains some need to examine which specific categories of “external” and fixed costs associated with motor vehicle usage actually vary incrementally with the number of trips taken or miles traveled. These costs could thus logically be imposed on a per-trip or per-mile basis. Such charges for highway travel could significantly revise travel decisions by highway users to select other modes, times, and frequencies. Advances in microelectronic technology currently permit the deployment of nonintrusive, low administrative cost mechanisms for assessing these costs to the specific vehicles and travelers who impose them. This situation affords the opportunity for a comprehensive overhaul of the current structure of highway transportation pricing and financing, including a move away from the current reliance on mechanisms such as motor fuel taxes, vehicle registration fees, and property taxation to finance road system construction, maintenance, and administration. This project would evaluate the potential magnitude of behavioral responses to new forms of pricing and the likely levels of such changes, including changes in the volume and patterns of tripmaking and the energy efficiency of motor vehicles, and assess the implications of these changes for energy consumption and greenhouse gas emissions in urban transportation.

Suggested By

Transportation Research Board 2002 Environmental Research Needs Conference Notes

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