What is road pricing? A Belgian perspectiveProf. Stef Proost KULeuven

What is road pricing?

• Charge per km that varies in function of time and place – Main idea is to regulate demand for road space by

cars and trucks such that the available road capacity is used efficiently – now we rely on too high gasoline and diesel taxes

– Main benefits are • less congestion for the same road space• Substitute for extending road capacity

– Main cost: installation costs and transaction cost

Misconceptions on road pricing policies 1

• Only charge trucks: – cars (80%) will quickly take road space made available by

trucks• Main change in car and truck use is not to switch to

other modes but to alter the timing of the trips• Road pricing has to make transport “greener”

– Better to use other instruments (Euro 1, 2, Etc…)• Important it to make sure everybody pays and that

there is maximal control– NO it is more important tolimit transaction costs to some

10% of total revenues

Misconceptions on road pricing policies 2

• Revenues should be spend on extra roads or on public transport– No, if roads are needed in presence of road pricing, one needs to

extend roads (“good investment policies”)– There is not necessarily a need for extra public transport investments

as main change is to change timing of trip and as public transport prices are often too low

– More important is to use revenues on good projects (lower taxes)• Road pricing will hurt the poor as much as the rich and this is

not fair– The main effect on the income distribution runs via the use of the

revenues, if one uses the revenues to decrease taxes for lowest income classes, this can have a favourable effect on income distribution

Road pricing in Belgium• To be introduced by Flanders and Wallonia for trucks

(2013?) and later cars – coordination with Brussels and Netherlands

• Main benefit is to help dealingwith road bottlenecks:– Antwerp Ring:

• correct tolling (road pricing) of all existing tunnels allows to postpone Oosterweel for another 10 to 20 years

– Brussels Ring:• Road pricing of Ring (and access into Brussels) will avoid extension

of the Ring• Discussion among regions: tolling game may lead to too high

charges as each region neglects the effects on the other regions • In addition: no tank tourism by foreign trucks

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Publishing Limited, Cheltenham , pp. 424De Borger, B., Proost S. (2009), De Oosterweelverbinding en het ontbrekende alternatief”, Leuvens Economisch Standpunt,

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Research Part B Methodological, Mayeres, I., Proost, S. (2001). Marginal tax reform, externalities and income distribution. Journal of public economics, 79(2), 343-

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