Working Papers,
Swedish National Road & Transport Research Institute (VTI)

Abstract: The EU is currently promoting sustainable mobility in its cities. This promotion can take the form of subsidies for cycling and public-transport infrastructure. This paper compares existing Swedish policy instruments for promoting more sustainable transport: government subsidies to infrastructure for sustainable modes in the form of city environmental agreements (CEAs), congestion and parking charges and a hypothetical incentive to reduce the mode share of cars. Analyses of the CEAs indicate that they do not reliably affect mode choice. The results for congestion and parking charges, on the contrary, indicate that these have a substantial potential to shift mode choices and improve welfare by pricing external costs. The outcomes of the hypothetical incentive based on achieved effects will depend on the extent to which cities are willing to use externality pricing and to which citizens are willing to change modes. The management and evaluation of this hypothetical incentive poses considerable requirements on data and estimations of a counter factual outcomes without incentives, and its necessary costs. Provided these requirements can be met, the incentive model appears to be a possible instrument for stimulating cities to move faster towards sustainable transport.

Keywords: Sustainable transport; Cities; Mode shares; Policy

JEL-codes: H23; H54; H71; R48; R49; R51

Language: English

29 pages, June 15, 2023

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