Chapter 8 Cordon charges and the use of revenue: A case study of Edinburgh

This case study examines the proposed Edinburgh cordon charge scheme, which - despite earmarking revenues for use in the transport sector - was still defeated at a referendum. This research suggests that whilst earmarking revenues reduced the efficiency of the scheme compared to a first best scenario, with lower toll charges than optimal, the scheme still offered substantial net benefits. Also whilst the City of Edinburgh Council had an incentive to charge residents of other authorities to favour its own residents, the proposed revenue distribution was equitable. However, the scheme still proved controversial; its defeat shows the importance of carrying such schemes forward on a regional basis with consensus between the local authorities involved.