Congestion pricing with electric vehicle exemptions: car-ownership effects and other behavioral adjustments

Isaksen, Elisabeth T. ORCID: 0000-0002-6557-8001 and Johansen, Bjørn G. (2025) Congestion pricing with electric vehicle exemptions: car-ownership effects and other behavioral adjustments. Journal of Environmental Economics and Management, 131. ISSN 0095-0696

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Abstract

Decarbonizing transportation requires a shift from conventional to zero-emission vehicles. We examine whether congestion pricing with electric vehicle (EV) exemptions accelerates this transition by encouraging a shift toward cleaner cars. To identify causal effects, we combine administrative data on car ownership with a triple-differences design that exploits household-level variation in policy exposure across metropolitan areas and work commutes. We find that higher rush hour charges for conventional vehicles significantly increase EV adoption, primarily through replacement rather than fleet expansion. However, responses vary by socioeconomic characteristics, with higher-income and well-educated households more likely to adopt EVs. Beyond car ownership, we document behavioral adjustments, including relocation to avoid tolls, re-routing around the cordon, and shifting travel timing. Overall, congestion pricing reduced traffic volumes and improved air quality. Our findings offer insights for designing equitable and effective transportation policies.

Item Type:	Article
Additional Information:	© 2025 Elsevier Inc.
Divisions:	Grantham Research Institute
Subjects:	G Geography. Anthropology. Recreation > GE Environmental Sciences H Social Sciences > HE Transportation and Communications H Social Sciences > HB Economic Theory J Political Science
JEL classification:	H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H23 - Externalities; Redistributive Effects; Environmental Taxes and Subsidies R - Urban, Rural, and Regional Economics > R4 - Transportation Systems > R41 - Transportation: Demand, Supply, and Congestion; Safety and Accidents; Transportation Noise R - Urban, Rural, and Regional Economics > R4 - Transportation Systems > R48 - Government Pricing; Regulatory Policies Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q5 - Environmental Economics > Q58 - Government Policy Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q5 - Environmental Economics > Q52 - Pollution Control Costs; Distributional Effects; Employment Effects Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q5 - Environmental Economics > Q55 - Technological Innovation
Date Deposited:	07 Apr 2025 08:54
Last Modified:	29 Apr 2025 08:15
URI:	http://eprints.lse.ac.uk/id/eprint/127836

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