A medium term evaluation of the Ecopass road pricing scheme in Milan: economic, environmental and transport impacts

The paper provides an evaluation of the Ecopass road pricing scheme for the years 2008, 2009 and 2010. The term Ecopass conveys the stated political objective of the scheme: a PASS to improve the quality of the urban environment (ECO). The scheme has actually improved the air quality in Milan, although the recommended PM10 threshold is still exceeded for a larger number of days than that recommended by EU directives. This paper estimates the costs and benefits of the scheme three years after its implementation using the same methodology applied in Rotaris et al. (2010) for the year 2008. The results indicate that the benefits still exceed the costs, and by an increasing amount, but at an annual decreasing rate of improvement. The Ecopass scheme has proved beneficial, but it seems to have exhausted its potential: little further gains in air quality could be obtained via a fiscal incentive to improve the abatement technology of the vehicles. The new administration, elected in June 2011, was faced with the task of deciding whether to dismiss, maintain or change the Ecopass scheme. The prevailing idea coming from the Ecopass Commission and from the advocacy groups was to extend both the area of application and the number of classes subject to the charge. In November 2011 the new administration decided to substitute Ecopass with Area C, a policy based on a congestion charge which incorporates some environmental elements.