This chapter considers some of the policy options faced when building a new road pricing system and analyses the current policy of the European Union. Aspects of the calculation of the marginal cost of road use are discussed including a) the producer's costs, b) congestion costs, c) environmental costs and d) accident costs. Demand management with advanced road pricing is considered for 3 situations: a congested city, a route where no alternatives exist (the bridge case) and a motorway with alternative routes. Supply management is discussed, in particular strengthening the distribution method and the decentralisation of decisions. The provisions and effects of EC Directive 93/89 are outlined. Recommendations are made for a future framework.
Abstract