Transportation Demand Management (TDM) refers to a broad set of policies that reduce vehicle use by either increasing the cost of driving or by making other lower-emitting forms of transportation—like walking, biking, buses, and light rail—more attractive. TDM can be a cost-effective way to address GHG emissions and local pollution, and is particularly important in urban areas where congestion and pollution are especially prevalent.

TDM can include policies to reduce the use of inefficient forms of transit, such as congestion pricing or driving restrictions aimed at private cars. The effectiveness of these policies depends in part on how easily they can be circumvented. TDM also includes policies to make more efficient forms of transit more attractive, such as developing efficient public transit, building bike lanes, and promoting walking through better urban design. Policy and investment in transportation demand management should be targeted at the most densely populated regions of the country, where the benefits from reduced congestion and local air pollution will be the largest.