AFFORD - Acceptability of Fiscal and Financial Measures and Organisational Requirements for Demand Management
Overview
Background & policy context:
In recent years, pricing policy has been seen as a central means of controlling transport demand, congestion and environmental impacts. Under market conditions, pricing has to be based on 'marginal social costs' to achieve economic efficiency (i.e. costs that take into account congestion, accidents, noise and emissions). However, charges and taxes for transport have traditionally had little connection to costs, instead being part of broader fiscal policies such as raising revenue. This gap is particularly evident in urban road transport, where prices typically do not vary to reflect concentrations of traffic in time and space and the associated costs. However, making the change to cost-based pricing faces many barriers: legal and institutional issues, public acceptance, and the limitations of current technology.
Objectives:
The aims of AFFORD were to define practical measures to implement marginal cost pricing for transport in cities, to assess the potential problems and to provide policy guidelines for introducing such measures.
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