Carbon Pricing in Traffic Networks
We study how externality pricing can steer traffic toward Wardrop equilibria respecting prescribed budgets. Our multi-commodity model encompasses carbon pricing, cordon pricing, and tradable credit schemes. We characterize the flows attainable when one common price may be assigned to each externality. We show that for continuous travel times and flow-independent externalities, every feasible externality budget is implementable. For flow-dependent externalities, smoothness bounds quantify the necessary budget relaxation; this links budget implementability to the price of anarchy. If travel times and externalities admit convex potentials, we give conditions for constructing prices implementing a given budget through convex optimization and specify explicit prices ensuring that relaxed budgets are respected by every equilibrium. As, for a single separable constant externality, total externality is nonincreasing in its price, this enables us to compute the whole price--equilibrium curve in finite time for separable, continuous, strictly increasing, piecewise affine travel times. Although this curve may have exponentially many pieces, the minimum price implementing a feasible budget is computable in polynomial time. The same machinery computes the range of market-clearing prices for tradable credit schemes. A computational study on several realistic traffic networks illustrates emission reductions from carbon pricing and the effects of cordon pricing on emissions within the cordon.