Governance and Modelling of a Tradable Transport Permit Scheme

Tradable road transport permits (or credit schemes) are an alternative to road pricing or taxation as an economic response to reducing congestion and environmental externalities. Despite being first proposed in the 1970, and with much interest in the past 30 years, none have been implemented in practise. Academic studies have suggested that tradable schemes are more cost effective and equitable than conventional fiscal policy instruments, and have been considered and trialled by policy makers, but have many outstanding considerations regarding their development, governance and execution. New and emerging technologies (and their related data) offer potentially reliable and efficient opportunities to introduce such schemes. In combination with other new mobility services (such as car or bike sharing) and as part of Mobility-as-a-Service packages that could revolutionise the way people make our transport decisions within a carbon constrained environment. Emissions Trading at a country or industrial level, as an economic instrument to achieving GHG emissions have now been in place for a number of years, such as the EU Emissions Trading. On an individual level it is more problematic. The concept is perhaps simple: Set a target to meet policy objectives, distribute a number of permits/credits across the population that would meet the target, set an initial market price for each permit and allow it to be determined through free-market trading. However, in practise, each of these steps raise many questions requiring multiple value judgements and complex feedbacks. For this reason, system dynamics (SD) offers a suitable approach to understanding the key relationships and significant variables that could lead to the success or failure of a tradable permit scheme. In this paper, the authors propose options for a regulatory framework for tradable permits that considers various issues of governance, fairness and acceptance. Building on this, the authors will then develop a qualitative causal loop diagram capturing the key variables that describes and characterises the system. The initial model will be a relatively simple case of the implementation, uptake and impact of a smartphone app for tradable parking permits (based on “real-world” experimentation). The intention is to then progress this into a more general model than can capture a more representative population for integration into the well-established LUTI SD model, MARS. Initially, the authors will focus on the choices of the users of the trading system, with a secondary development around the wider impacts of those choices. In this way the authors can consider how the system can be designed to better meet sustainability goals. The authors will make proposals for development into a quantitative model, using real world data from trials where available, and design simple scenarios to be tested to assess governance structures and potential impacts on congestion, emissions and equitable distribution of access rights.

  • Record URL:
  • Supplemental Notes:
    • Abstract used by permission of Association for European Transport. Alternative title: Modelling Governance and Sustainability of a Tradable Transport Permit Scheme
  • Corporate Authors:

    Association for European Transport (AET)

    1 Vernon Mews, Vernon Street, West Kensington
    London W14 0RL,    
  • Authors:
    • Harrison, Gillian
    • Shepherd, Simon
    • Mullen, Caroline
  • Conference:
  • Publication Date: 2020


  • English

Media Info

  • Media Type: Digital/other
  • Features: References; Tables;
  • Pagination: 11p
  • Monograph Title: European Transport Conference 2020

Subject/Index Terms

Filing Info

  • Accession Number: 01766219
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Feb 16 2021 2:21PM