Do emission-based on-street parking charges work? Evidence from a natural experiment

Abstract

Charging for on-street parking is a common policy instrument to regulate car use in cities, yet its effectiveness depends on drivers’ responses to prices. We study an innovative policy reform, an emission-based parking prices implemented in Lyon in June 2024. Exploiting this natural experiment, we combine ten million parking transactions with vehicle registration data before and after the reform. We use a continuous DiD framework, building on recent econometric advances for heterogeneous treatment effects with continuous doses. Results show a significant and persistent reduction in parking demand. Responses are heterogeneous and increase with the magnitude of the price changes. More polluting vehicles are disproportionately exposed to higher price increases and account for a larger share of demand reduction. To our knowledge, this paper provides the first empirical evidence on emission-based parking pricing, suggesting it can curb high-emission vehicle use and mitigate environmental externalities.