Distributional and Economic Impacts of Nationwide Car Road Pricing: A CGE Analysis for Austria

ABSTRACT: Nationwide car road pricing schemes are discussed across Europe, partly as extensions of the truck road pricing schemes already in existence. This paper analyses the economic and environmental feedbacks of such nationwide car road pricing schemes on gross production, sectoral structure, employment, consumption and CO2 emissions by means of a passenger transport demand oriented CGE model. As a main focus the distributional impacts across household income groups are explored. It has been argued that the poor households would have to take an unproportional share of the burden. We give a detailed analysis for the case of Austria and show that, while low income households do experience a reduction in welfare, road pricing does have a progressive effect, with a significantly stronger welfare reduction for high income households