Road pricing strategies for the greater Oslo area

Road pricing can produce substantial efficiency gains, but high and low income groups will be affected differently. This report describes the construction and application of a modelling framework to analyse both efficiency and equity impacts of selected first- and second best road pricing strategies in the greater Oslo area of Norway, and report results. The strategies considered differ with respect to the road pricing measures that are available (traditional vs link-based measures), whether only short-term or also medium-term effects are considered, and with respect to redistribution and use of the revenue. In conclusion, there are trade-offs between the three aspects of road pricing – efficiency in the transport sector, efficiency of the tax system and equity. For a successful implementation of road pricing, these tradeoffs must be studied carefully in each particular instance.