From our ‘Thinking outside the box’ series, Professor David Hensher discusses tradeable Mobility and environmental credits in a push-pull context when distance-based charging (DBC) is introduced for car use. 

The idea of mobility credits aligned with carbon credits is not new, and markets have been proposed and operated for some time with varying degrees of success (se Álvarez-Ossorio 2024, Servatius 2023, Glavić et al. (2017). Reference to transferable mobility credits in the context of car use has been promoted as an alternative to congestion pricing that resolves the drawbacks. Specifically, given a pre-allocation of mobility credits to all car users, they can be transferred through sale within a particular urban region from car users with low vehicle-use demands to people with higher demands (Hussain 2025, Verhoef et al. 1997). One objective is to give people the choice to reduce their car use.

Tradable mobility credit (TMC) schemes are generally conceptualised as cap‑and‑trade systems for travel demand, in which a regulator allocates credits to users that can be consumed for travel and traded in a market. Early and subsequent work shows that such systems can achieve congestion reduction while maintaining revenue neutrality and improved equity outcomes relative to conventional pricing instruments. Under a TMC system, travellers with lower mobility demand can sell unused credits, while those with higher demand purchase additional units, enabling allocation efficiency through decentralised market interactions (de Palma2018).

Comparisons between pricing and credit-based instruments suggest that, under ideal conditions, both mechanisms can produce similar efficiency outcomes, although they differ significantly in their distributional and behavioural implications (DePalma et al 2018). In particular, token-based systems embed redistribution within the allocation of credits, potentially mitigating equity concerns that arise in pricing-only approaches. This distinction has motivated the view that mobility credits may constitute a politically more acceptable reform pathway for demand management. (Chen et al 2022).

Despite the growing body of work on both RUC and mobility credits, a clear gap remains in the literature. Existing studies typically focus on either pricing-based instruments or credit-based systems in isolation, with relatively little attention to their integration. Moreover, while recent research has advanced the design and modelling of TMC schemes, there is limited consideration of how these systems can be combined with RUC to deliver a coherent and implementable policy framework (see Bliemer ad Loder 2025).

This think piece addresses contributes to addressing this gap by developing an integrated approach that combines price-based road user charging with a mobility credit system, explicitly recognising the complementary roles of pricing, quantity constraints, and behavioural incentives. In doing so, it contributes to the literature by providing a unified conceptual and modelling framework that links demand management, equity considerations, and even emerging MaaS-based delivery platforms.

The approach that we propose recognises the need to progress with a road user charging (RUC) scheme such as a distance-based charge (DBC) (Hensher 2026) that can be applied to all cars, that recognises that if the DBC as a push initiative can be combined with pull initiatives, then  the ability to garner support from car users in particular can be achieved within a setting where we strive for sustainable outcomes that give car users attractive options, through defined incentives, to adjust their car use in line with their preferences, that can include avoiding some quantum of the DBC while still benefitting from the use of their car.

The approach we detail is referred to as “Behavioural Change and Tradeable Mobility Credits in a Push-Pull setting” where we shift the narrative from costs and penalties towards credits and incentives, supporting integrated push‑and‑pull approaches (Hensher et al 2026, 2026a, Bliemer and Loder 2025). In designing a mobility‑credit calculation system with an environmental twist, we have to decide what behaviours we want to reward (pull) and discourage (push); how credits are earned, charged, traded, redeemed, and expire; and what credit structure to adopt, suggesting we start with a simple reward-only system where you earn credits for each trip across public transport modes, walk/cycling, and carpool/share ride, avoiding peak periods, and even using mobility as a service or feature (MaaS, MaaF) bundles.

We need a ‘currency’ to use in establishing the value of each initiative, and we do this by defining a credit unit.  We select 1 Credit (CR) as the internal unit, pegged to say $0.10 of mobility value (purely an example) for accounting. The value is set by policy and can be changed if needed. For example, if a trip is valued at $2.00, then $2.00 ÷ $0.10 = 20 Credits. The system would charge 20 CRs. These credits can be traded (buy and sell), and users can hold a multi‑period wallet of CR that can be earned, saved, spent on RUC or other modes and non-transport services, or traded between individuals if the market feature is enabled.

A peg creates a stable, predictable conversion between the economic basis (real-world costs), and the marketplace unit (CR). It is the same reason carbon markets, energy markets, or in-game economies use points, credits, or tokens rather than actual currencies. By choosing a peg (e.g., $0.10 = 1 CR), the system can keep economic incentives intact, adjust pricing rules behind the scenes, and communicate in a simpler unit to users. An initial budget of credits may be given free of charge to travellers, while a lack of credits must be compensated through trad­ing with travellers in surplus.

The following peg and redemption assumptions are used in the example to follow: 1 CR = $0.10 payable toward RUC (DBC) or Opal (public transport) fare wallet; and credits expire after 90 days to drive continuous engagement. They can be multi‑period but temporally bounded. Mobility Coin modelling generally supports multi‑period budgeting with expiration curbs hoarding to avoid depress market price. An equity feature should be included where monthly lump‑sum “starter” credits are allocated to low‑income postcodes and mobility‑impaired drivers; and in addition, geographic carve‑outs or reduced RUC for public transport‑poor areas are provided until service uplift. Equity or fairness considerations are a core requirement in pricing reforms.

We have set up a Sydney tariff schedule to show how the system might work (noting arbitrary assignment of credits until research can support an appropriate set of values).  We take initial values for say a 12‑month pilot, defining 1 Cr = $0.1 of mobility value. RUC base rates are applied for cars in cents/km (a DBC), with higher values for trucks, and in the future linked to car size and fuel source such as electric vehicle (EVs), ICE’s, and Hybrids.  We use the following unit rates in the example: Off‑peak metro area = 3 c/km; AM/PM peaks = 7 c/km; CBD cordon or flagged bottleneck links: +50% on the above. A flat rate of 3c/km might apply to rural/regional trips although this is not applicable in the Sydney example. International guidance supports zone and time of day differentiation to reflect congestion and other externalities.

Credit earning is assigned to various modes as follows: Train/Metro/Bus= +5 CR per boarding; and an off‑peak multiplier ×1.3 is applied which mirrors Sydney Opal’s 30% off‑peak benefit in spirit. Cycling/Walking = +1 CR per km, capped per day to manage fraud.  Global case examples show per‑km rewards for active travel. Carpool/car sharing = +0.5 CR per km (car driver only) when verified, and EV = +2.5 Cr per trip which should help the sustainability argument and temper criticism of applying and RUC to EVs, hence an environmental credit, and Autonomous EVs which are currently unknown and not included in the example.

We can apply these rules to a worked Sydney example (weekday) where Push-Pull CR becomes a tokenised pricing abstraction. We select a weekday travel profile as follows for an individual:

• A car driver travels 8 km drive-alone into the CBD during AM peak (Zone +50%) and 8 km off‑peak return. They also take one off‑peak train in the evening to another appointment.
• The RUC DBC charges are base peak 7 c/km, off‑peak 3 c/km; and CBD ×1.5. Rural/regional could be a flat 3c/km. Give these rates and activity, the RUC_AUD is as follows: AM peak leg: 8 km × $0.07 × 1.5 = $0.84, and PM off‑peak leg: 8 km × $0.03 × 1.0 = $0.24. Total RUC = $1.08 (0.84+0.24) ⇒ 10.8 CR (at $0.10/CR peg). The 10.8 comes directly from converting the dollar value of the RUC ($1.08) into credits (CR) using the peg of $0.10 per CR.
• Credits are also earned: Train (off‑peak): +5 CR × 1.3 = 6.5 CR, and if an EV we can apply an adjustment of 2.5 CR per trip.
• The Net CR without an EV) = 6.5 – 10.8 = –4.3 CR ⇒ and a user either pays $0.43 or earns 4.3 CR via more PT/active trips (or buys credits). If we adjust for an EV, the payment is reduced and increases CR by 2.5*$0.1= 0.25 cents, so the RUC/DBC = $0.43-$0.25.

There are clear implications on the quantum of DBC revenue which may be a sticking point if Treasuries have an expected budget outcome from DBC revenue. The CCR incentive, even as a modest PT use reduces/pays down the RUC.

A crucial challenge for the push-pull framework, despite its sustainability appeal, is a preparedness of Government (Treasury) to support this since it could impact revenue, plus there are issues of State vs Federal jurisdictions matters, although delegation can resolve this with agreed financial transfers. Possible funding sources are listed below, recognising the benefits of a push-pull framework.

In summary, tradable mobility credits (TMCs) as a market-based complement to road user charging (RUC) operate as a cap‑and‑trade system, where a regulator allocates credits to users and allows trading based on individual travel needs (Tian et al. 2019). Unlike conventional RUC schemes, which rely primarily on monetary disincentives only, mobility credits introduce a dual mechanism of constraint and reward. This distinction is critical in addressing the long-standing issues of public acceptability and equity associated with road pricing reform. In this context, the integration framework can be positioned as: RUC (price-based “stick” or “push’) + mobility credits (quantity-based “carrot” or “pull’)) hybrid demand management system.