Innovations in Road Finance

This research examines the policy objectives, technical approaches, and political reactions associated with the current upsurge in electronic road pricing (ERP). The authors recently examined more than 90 implemented or proposed ERP projects around the globe, falling into four general categories: (a) facility congestion tolls, (b) cordon congestion tolls, (c) automated weight-distance truck tolls, and (d) distance-based user fees spanning entire road networks. Findings suggest that political and structural liabilities associated with traditional finance mechanisms—most notably motor fuel taxes—have motivated jurisdictions to explore alternatives such as local option sales taxes, public-private partnerships, and ERP. A compelling advantage of ERP is that it provides decision makers with what appears to be an effective tool for combating traffic congestion and automotive emissions. Meanwhile, many of the underlying technologies to support ERP have matured in recent years, enabling the rapid proliferation of experimentation and implementation in this arena.

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