This paper reviews the literature on the fiscal policy
instruments commonly used to reduce transport sector
externalities. The findings show that congestion charges
would reduce vehicle traffic by 9 to 12 percent and
significantly improve environmental quality. The vehicle
tax literature suggests that every 1 percent increase in
vehicle taxes would reduce vehicle miles by 0.22 to 0.45

This study reviews regulatory instruments designed to reduce environmental externalities from the transport sector. The study finds that the main regulatory instruments used in practice are fuel economy standards, vehicle emission standards, and fuel quality standards.