Tradable traffic rights for urban transport

Abstract

The objective of this paper is to study the theory of tradable pollution rights applied to urban mobility. The paper will focus on the urban congestion problems and investigates the possibility to keep under control not only urban pollution but congestion through tradable rights applied to traffic management. The introduction of tradable rights in urban mobility is considered in this paper to establish a market system where traffic is kept under control at a given level. Tradable rights are exchanged between different subjects on the basis of their different need to travel and of their consequent willingness to pay. This gives place to a market for rights to circulate at a market price which results from the intersection of supply and demand of tradable certificates. Price is not, therefore, fixed by a policy maker. The paper discusses different schemes of tradable permits markets and focuses on the main effects and problems arising from the application of this tool: fixing circulation level, defining criteria to distribute certificates, preserving market competition and urban development. Furthermore, the paper investigates some possible solutions to emerging problems and analyses the possibility of combining tradable permits and other policies in order to point at an organic governance of urban mobility.