GREEN CARS STERILIZE CONGESTION CHARGES: A MODEL ANALYSIS OF THE REDUCED IMPACT OF STOCKHOLM ROAD TOLLS

Beforeafter comparisons indicate that the impact of the road toll in Stockholm on traffic volumes was smaller when the system was reopened in 2007, compared to the effect during the trial in 2006. We calibrate a modalchoice model on data for Stockholm from before and during the trial and use it to simulate the effects of some seemingly subtle changes of the design of the congestioncharge scheme. We find that the growth of the share of exempted ”green” cars and the decision to make charges deductible from the income tax may have considerably reduced the positive welfare effect of the toll.