Cost-benefit analysis of the congestion charge in Gothenburg

Abstract

In 2013 a congestion charge was implemented in Gothenburg. The main goal of the charge is to co-finance the West Swedish package, a collection of infrastructural investments in the region. Implementing a congestion charge is a common policy instrument used in order to reduce different externalities associated with road transportation. By increasing the cost of driving, traffic volume decreases and different positive effects occur, such as reduced travel time as well as improved environmental and health benefits. By conducting a cost and benefit analysis these positive effects can be measured and compared with the associated costs of the charging system. In effect, a cost-benefit analysis can be used as a tool to measure the social benefits of a congestion charge. Studies conducted in Stockholm and London show positive net benefits resulting from the congestion charges implemented in respective city. This thesis uses a cost-benefit analysis to evaluate the welfare effects of the congestion charge in Gothenburg in a similar way. The results show a positive net benefit for Gothenburg with the current toll charge when public transportation is excluded from the analysis. The sensitivity analysis show that when the charge increases from 13 SEK to 15 SEK the net benefits also increases.