Specific environmental taxes are minor in relation to fuel excise duty, road tolls and annual taxes on the ownership or use of vehicles, in terms of their cost to transport operators and users (see the OECD environmental tax data base3). Although differentiation of general transport taxes on the basis of environmental performance is quite widely used to leverage vehicle purchase decisions, this paper is concerned with the larger and more fundamental potential for influencing patterns of demand for road transport offered by the introduction of road pricing, in the form of electronic kilometre charges and area wide road pricing systems. Finance and Transport Ministers are considering the introduction of such charges, and/or the wider use of road tolls, in a number of OECD countries. Each government considering reform faces urgent pressures -- altering taxation is always politically sensitive and not something undertaken lightly.

URL: http://www.cemt.org/online/speeches/SPpavia04.pdf