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Wikipedia

Congestion pricing

January 01, 1970

This article is about traffic congestion pricing. For other types of congestion pricing, see Dynamic pricing and Variable pricing. For the broader concept of direct charges paid by road users, see Road pricing.

Congestion pricing or congestion charges is a system of surcharging users of public goods that are subject to congestion through excess demand, such as through higher peak charges for use of bus services, electricity, metros, railways, telephones, and road pricing to reduce traffic congestion; airlines and shipping companies may be charged higher fees for slots at airports and through canals at busy times. Advocates claim this pricing strategy regulates demand, making it possible to manage congestion without increasing supply.

Electronic Road Pricing gantry in Singapore, the first place in the world to implement an urban cordon area congestion pricing scheme.

According to the economic theory behind congestion pricing, the objective of this policy is to use the price mechanism to cover the social cost of an activity where users otherwise do not pay for the negative externalities they create (such as driving in a congested area during peak demand). By setting a price on an over-consumed product, congestion pricing encourages the redistribution of the demand in space or in time, leading to more efficient outcomes.

Singapore was the first country to introduce congestion pricing on its urban roads in 1975, and was refined in 1998. Since then, it has been implemented in cities such as London, Stockholm, Milan, and Gothenburg. It has also been proposed in San Francisco, and will be implemented in New York City in June 2024. Greater awareness of the harms of pollution and emissions of greenhouse gases in the context of climate change has recently created greater interest in congestion pricing.

Implementation of congestion pricing has reduced congestion in urban areas,[1] reduced pollution,[2] reduced asthma,[3] and increased house values,[4] but has also sparked criticism and public discontent. Critics maintain that congestion pricing is not equitable, places an economic burden on neighboring communities, and adversely affects retail businesses and general economic activity.

There is a consensus among economists that congestion pricing in crowded transportation networks, and subsequent use of the proceeds to lower other taxes, makes the average citizen better off.[5] Economists disagree over how to set tolls, how to cover common costs, what to do with any excess revenues, whether and how "losers" from tolling previously free roads should be compensated, and whether to privatize highways.[6] Four general types of systems are in use: a cordon area around a city center, with charges for passing the cordon line; area wide congestion pricing, which charges for being inside an area; a city center toll ring, with toll collection surrounding the city; and corridor or single facility congestion pricing, where access to a lane or a facility is priced.

Description edit

Congestion pricing is a concept from market economics regarding the use of pricing mechanisms to charge the users of public goods for the negative externalities generated by the peak demand in excess of available supply. Its economic rationale is that, at a price of zero, demand exceeds supply, causing a shortage, and that the shortage should be corrected by charging the equilibrium price rather than shifting it down by increasing the supply. Usually this means increasing prices during certain periods of time or at the places where congestion occurs; or introducing a new usage tax or charge when peak demand exceeds available supply in the case of a tax-funded public good provided free at the point of usage.

 
Economic rationale for moving from untolled equilibrium to congestion pricing equilibrium.

According to the economic theory behind congestion pricing, the objective of this policy is the use of the price mechanism to make users more aware of the costs that they impose upon one another when consuming during the peak demand, and that they should pay for the additional congestion they create, thus encouraging the redistribution of the demand in space or in time,[7][8] or shifting it to the consumption of a substitute public good; for example, switching from private transport to public transport.

This pricing mechanism has been used in several public utilities and public services for setting higher prices during congested periods, as a means to better manage the demand for the service, and whether to avoid expensive new investments just to satisfy peak demand, or because it is not economically or financially feasible to provide additional capacity to the service. Congestion pricing has been widely used by telephone and electric utilities, metros, railways and autobus services,[9] and has been proposed for charging internet access.[10] It also has been extensively studied and advocated by mainstream transport economists for ports, waterways, airports and road pricing, though actual implementation is rather limited due to the controversial issues subject to debate regarding this policy, particularly for urban roads, such as undesirable distribution effects, the disposition of the revenues raised, and the social and political acceptability of the congestion charge.[11][12]

 
An introductory flowchart describing congestion pricing

Congestion pricing is one of a number of alternative demand side (as opposed to supply side) strategies offered by economists to address traffic congestion.[13] Congestion is considered a negative externality by economists.[14] An externality occurs when a transaction causes costs or benefits to a third party, often, although not necessarily, from the use of a public good: for example, if manufacturing or transportation cause air pollution imposing costs on others when making use of public air. Congestion pricing is an efficiency pricing strategy that requires the users to pay more for that public good, thus increasing the welfare gain or net benefit for society.[15][16]

Nobel-laureate William Vickrey is considered by some to be the father of congestion pricing, as he first proposed adding a distance- or time-based fare system for the New York City Subway in 1952.[17][18][19] In the road transportation arena these theories were extended by Maurice Allais, Gabriel Roth who was instrumental in the first designs and upon whose World Bank recommendation the first system was put in place in Singapore.[20] Also, it was considered by the Smeed Report, published by the British Ministry of Transport in 1964,[21] but its recommendations were rejected by successive British governments.[22]

The transport economics rationale for implementing congestion pricing on roads, described as "one policy response to the problem of congestion", was summarized in testimony to the United States Congress Joint Economic Committee in 2003: "congestion is considered to arise from the mispricing of a good; namely, highway capacity at a specific place and time. The quantity supplied (measured in lane-miles) is less than the quantity demanded at what is essentially a price of zero. If a good or service is provided free of charge, people tend to demand more of it—and use it more wastefully—than they would if they had to pay a price that reflected its cost. Hence, congestion pricing is premised on a basic economic concept: charge a price in order to allocate a scarce resource to its most valuable use, as evidenced by users' willingness to pay for the resource".[23]

Roads edit

For broader coverage of this topic, see Road pricing.

Practical implementations of road congestion pricing are found almost exclusively in urban areas, because traffic congestion is common in and around city centers. Congestion pricing can be fixed (the same at all times of day and days of the week), variable (set in advance to be higher at typically high-traffic times), or dynamic (varying according to actual conditions).

As congestion pricing has been increasing worldwide, the schemes implemented have been classified into four different types: cordon area around a city center; area wide congestion pricing; city center toll ring; and corridor or single facility congestion pricing.[24]

Cordon area and area wide edit

See also: Electronic Road Pricing (Singapore), London congestion charge, Stockholm congestion tax, Ecopass, Milan Area C, and Gothenburg congestion tax
 
At Old Street, street markings and a sign (inset) with the white-on-red C alert drivers to the congestion charge, London.

Cordon area congestion pricing is a fee or tax paid by users to enter a restricted area, usually within a city center, as part of a demand management strategy to relieve traffic congestion within that area.[25] The economic rationale for this pricing scheme is based on the externalities or social costs of road transport, such as air pollution, noise, traffic accidents, environmental and urban deterioration, and the extra costs and delays imposed by traffic congestion upon other drivers when additional users enter a congested road.[26]

 
Rome's Traffic Limited Zone (ZTL) entry control point with automatic surveillance.

The first implementation of such a scheme was Singapore Area Licensing Scheme in 1975, together with a comprehensive package of road pricing measures, stringent car ownership rules and improvements in mass transit.[27][28] Thanks to technological advances in electronic toll collection, electronic detection, and video surveillance technology, collecting congestion fees has become easier. Singapore upgraded its system in 1998,[29] and similar pricing schemes were implemented in Rome in 2001,[30] London in 2003 with extensions in 2007; Stockholm in 2006, as a seven-month trial, and then on a permanent basis.[31] In January 2008 Milan began a one-year trial program called Ecopass, charging low emission standard vehicles and exempting cleaner and alternative fuel vehicles.[32][33][34] The Ecopass program was extended until December 31, 2011,[35][36] and on January 16, 2012, was replaced by Area C, a trial program that converted the scheme from a pollution-charge to a congestion charge.[37] The Gothenburg congestion tax was implemented in January 2013 and it was modeled after the Stockholm scheme.[38]

 
Trängselskatt automatic control point at Ropsten, Stockholm. The sign on the right informs the drivers about the different fees, which vary depending on the time of the day.

Singapore and Stockholm charge a congestion fee every time a user crosses the cordon area, while London charges a daily fee for any vehicle driving in a public road within the congestion charge zone, regardless of how many times the user crosses the cordon.[39] Stockholm has put a cap on the maximum daily tax,[40] while in Singapore the charge is based on a pay-as-you-use principle, and rates are set based on traffic conditions at the pricing points, and reviewed on a quarterly basis. Through this policy, the Land Transport Authority (LTA) reports that the electronic road pricing "has been effective in maintaining an optimal speed range of 45 to 65 km/h for expressways and 20 to 30 km/h for arterial roads".[41]

Singapore edit

Main article: Electronic Road Pricing
 
Automatic tolling gantry of Singapore's Electronic Road Pricing scheme.

In an effort to improve the pricing mechanism, and, to introduce real-time variable pricing,[42] Singapore's LTA together with IBM, ran a pilot from December 2006 to April 2007, with a traffic estimation and prediction tool (TrEPS), which uses historical traffic data and real-time feeds with flow conditions from several sources, in order to predict the levels of congestion up to an hour in advance. By accurately estimating prevailing and emerging traffic conditions, this technology is expected to allow variable pricing, together with improved overall traffic management, including the provision of information in advance to alert drivers about conditions ahead, and the prices being charged at that moment.[43][44]

In 2010 the Land Transport Authority began exploring the potential of Global Navigation Satellite System as a technological option for a second generation ERP. LTA objective is to evaluate if the latest technologies available in the market today are accurate and effective enough for use as a congestion charging tool, especially taking into consideration the dense urban environment in Singapore. Implementation of such system is not expected in the short term.[45]

London edit

Main article: London congestion charge

A proposal by former Mayor of London Ken Livingstone would have resulted in a new pricing structure based on potential CO2 emission rates by October 2008.[46] The goal was that vehicles with the very lowest CO2 emission rates would be exempted, and those with higher emission rates would pay a new higher charge of £25, with the rest paying the same charge they pay today.[47] However, Livingstone's successor as Mayor of London, Boris Johnson, announced at the beginning of his administration that he would reform the congestion charge.[48]

 
Entrance to the London Congestion Charge zone. Shown traffic sign and the CCTV used to control vehicles entering the zone's boundary.

Johnson announced in July 2008 that the new CO2 charging structure will no longer be implemented.[49] Among other reasons, he said the environmental charge would encourage travel by thousands of smaller vehicles free of charge, resulting in increased congestion and pollution.[49][50] He also discarded plans for extending the charge zone to the suburbs, and announced he will review the western extension implemented in 2007, based on a public consultation planned for September 2008.[51] Having held a five-week public consultation with residents in the autumn of 2008, Johnson decided to remove the 2007 Western Extension from the congestion charging zone beginning on January 4, 2011, to increase the basic charge to £10, and also to introduce an automated payment system called Congestion Charging Auto Pay (CC Auto Pay), which will charge vehicles based on the number of charging days a vehicle travels within the charging zone each month, and the drivers of these vehicles will pay a reduced £9 daily charge.[52]

In November 2012 Transport for London (TfL) presented a proposal to abolish the Greener Vehicle Discount that benefited, among others, vehicles with small diesel engines that avoid the charge because their engines produce emissions of less than 100g per km of CO2.[53] Approved by Mayor Boris Johnson in April 2013, the Ultra Low Emission Discount (ULED) went into effect on 1 July 2013. The ULED introduced more stringent emission standards that limit the free access to the congestion charge zone to all-electric cars, some plug-in hybrids, and any car or van that emits 75g/km or less of CO2 and meets the Euro 5 emission standards for air quality. The measure was designed to curb the growing number of diesel vehicles on London's roads. About 20,000 owners of vehicles registered for the Greener Vehicle Discount by June 2013 were granted a three-year sunset period before they have to pay the full congestion charge.[54][55][56] The sunset period ended on 24 June 2016.[57]

Since the congestion charge introduction in 2003, over £1.2 billion has been invested in transport through December 2013, including £960 million on improvements to the bus network; £102 million on roads and bridges; £70 million on road safety; £51 million on local transport/borough plans; and £36 million on sustainable transport and the environment.[58] There has been criticism because during the first ten years since the scheme was implemented, gross revenue reached about £2.6 billion, but only £1.2 billion has been invested, meaning that 54% of gross revenues have been spent in operating the system and administrative expenses.[59]

In June 2014 the standard charge was raised 15% from £10 per day to £11.50.[60] According to TfL the objective of the increase is to recoup inflation over the previous three years and ensure the charge remains an effective deterrent to making unnecessary journeys in central London.[61]

A new toxicity charge, known as T-charge was introduced from 23 October 2017. Older and more polluting cars and vans that do not meet Euro 4 standards will have to pay an extra £10 charge on top of the £11.50 congestion charge to drive in central London, within the Congestion Charge Zone (CCZ). The charge typically applies to diesel and petrol vehicles registered before 2006, and the levy is expected to affect up to 10,000 vehicles.[62][63] London Mayor Sadiq Khan announced the introduction of the scheme in February 2017 after London achieved record air pollution levels the previous month, and the city was put on very high pollution alert for the first time ever, as cold and stationary weather failed to clear toxic pollutants emitted mainly by diesel vehicles.[64]

On 8 April 2019, the T-charge was expanded into the Ultra Low Emission Zone (ULEZ).[65]

 
Entrance to Milan Area C

Milan edit

Main articles: Ecopass and Milan Area C

The Ecopass pollution charge ended on December 31, 2011, and was replaced by the Area C scheme, which went into effect on January 16, 2012, initially as an 18-month pilot program. The Area C scheme is a conventional congestion pricing scheme and is based on the same Ecopass geographic area. Vehicles entering the charging zone incur a charge of €5 regardless of their pollution level. However, residents inside the area have 40 free entries per year and then a discounted charge of €2.[37][66][67] Electric vehicles, public utility vehicles, police and emergency vehicles, buses and taxis are exempted from the charge. Hybrid electric and bi-fuel natural gas vehicles (CNG and LPG) were exempted until January 1, 2013, Exemption has been postponed until December 31, 2016.[67]

The scheme was made permanent in March 2013. All net earnings from Area C are invested to promote sustainable mobility and policies to reduce air pollution, including the redevelopment, protection and development of public transport, "soft mobility" (pedestrians, cycling, Zone 30) and systems to rationalize the distribution of goods.[68]

Stockholm edit

Main article: Stockholm congestion tax
 
Automatic detection system at Stockholm's first electronic gantry at Lilla Essingen.

On 1 January 2016, congestion taxes were increased in the inner-city parts of Stockholm, and also the congestion tax was introduced on Essingeleden motorway. This was the first increase of the tax since it was introduced permanently in 2007.[69][70]

The congestion tax is being introduced at the access and exit ramps of two interchanges on Essingeleden in order to reduce traffic jams in peak periods, and with shorter traffic jams on Essingeleden, the surrounding roads are expected to have shorter tailbacks. The transport agencies involved expected to reduce traffic on Essingeleden by some 10% in peak hours.[69] One week after the tax began to be charged, traffic on the motorway had decreased by 22% compared to a normal day in mid-December.[70]

The tax increase was implemented not only to improve accessibility and the environment, but also to help develop the infrastructure. The additional funds will contribute to finance the extension of the Stockholm metro.[69] As the Stockholm congestion tax varies by time of the day, the highest increase took place at the two busiest rush hour periods, 7:30 to 8:29, and 16:00 to 17:29, from SEK 20 to SEK 30. The objective was to steer the traffic towards other times of the day and public transport, and in this way reduce congestion in the Inner City area. Also the maximum amount levied was raised to SEK 105 per day and vehicle.[69]

Norway edit

See also: Toll roads in Norway

Several cities in Norway have tolled entrances to the more central urban areas, the first being Bergen in 1986. Starting with Trondheim in 2010, later in Kristiansand, Bergen and Oslo, time differing fees were introduced, so that rush hours (in Oslo 06.30 – 09.00 and 15.00 – 17.00) cost more. The price is (in 2020) typically NOK 28 (€2.37) per passage, but to enter Oslo to the inner city and leave means passing five stations which costs NOK 126 (€10,66).

Old town centres edit

See also: Durham City congestion charge

Around Europe several relatively small cities, such as Durham, England;[71] Znojmo, Czech Republic;[72] Riga, Latvia;[73] and Valletta, Malta,[74][75] have implemented congestion pricing to reduce traffic crowding, parking problems and pollution, particularly during the peak tourism season.

Durham introduced charges in October 2002, reducing vehicle traffic by 85% after a year; prior to this 3,000 daily vehicles had shared the streets with 17,000 pedestrians.[76]

Valletta has reduced daily vehicles entering the city from 10,000 to 7,900; making 400 readily available parking places in the center. There has been a 60% drop in car stays by non-residents of more than eight hours, but there has been a marked increase of 34% in non-residential cars visiting the city for an hour or less.[75][77]

Rejected proposals edit

 
The New York City congestion pricing proposal was rejected by the New York State Legislature in 2008, but later approved in 2019.
 
A map of Greater Manchester highlighting area of the rejected congestion charging scheme
See also: Congestion charging in Greater Manchester, Edinburgh congestion charge, Electronic Road Pricing (Hong Kong), and New York congestion pricing

Hong Kong conducted a pilot test on an electronic congestion pricing system between 1983 and 1985 with positive results.[78] However, public opposition against this policy stalled its permanent implementation.

In 2002 Edinburgh, United Kingdom, initiated an implementation process; a referendum was conducted in 2005,[79] with a majority of 74.4% rejecting the proposal.[80][81]

Councils from across the West Midlands in the United Kingdom, including Birmingham and Coventry, rejected the idea of imposing congestion pricing schemes on the area in 2008, despite promises from central government of transport project funding in exchange for the implementation of a road pricing pilot scheme.[82]

In 2007, New York City shelved a proposal for a three-year pilot program for implementation in Manhattan,[18][83][84][85] and a new proposition was denied in 2008,[86] with potential federal grants of US$354 million being reallocated to other American cities.[87][88]

Greater Manchester, United Kingdom, was considering a scheme with two cordons, one covering the main urban core of the Greater Manchester Urban Area and another covering the Manchester city centre.[89][90][91] The measure was supported by the government,[92] but three local authorities rejected it (Bury, Trafford and Stockport); the support of two-thirds of Manchester's 10 local councils was needed for it to be implemented.[93] A comprehensive transport investment package for Manchester, which included the congestion pricing element, was released for further public consultation and was to be subject of a referendum in December 2008.[94] On 12 December 2008 the scheme was overwhelmingly rejected by 10 out of 10 councils by a public referendum.[95]

Current proposals edit

See also: San Francisco congestion pricing and Congestion pricing in New York City
 
Traffic entering San Francisco through the Golden Gate Bridge.
United States edit

In August 2007, the United States Department of Transportation selected five metropolitan areas to initiate congestion pricing demonstration projects under the Urban Partnerships Congestion Initiative, for US$1 billion of federal funding.[96] The five projects under this initiative are Golden Gate Bridge in San Francisco,[97] State Route 520 serving downtown Seattle and communities to its east,[98] Interstate 95 between Miami and Ft. Lauderdale,[99] Interstate 35W serving downtown Minneapolis,[100] and a variable rate parking meter system in Chicago plus Metro ExpressLanes in Los Angeles County, which replaced New York City after it left the program in 2008.[101]

San Francisco transport authorities began a feasibility study in 2006 to evaluate the introduction of congestion pricing.[102][103] The charge would be combined with other traffic reduction implementations, allowing money to be raised for public transit improvements and bike and pedestrian enhancements.[104] The initial pricing scenarios were presented in public meetings conducted in December 2008,[105] and the final study results were announced in November 2010, proposing modified alternatives based on the public's feedbacks, and the updated proposal calls for implementing a six-month to one-year trial in 2015.[106][107] [needs update]

Governor Andrew Cuomo reintroduced a congestion pricing proposal for New York City in 2017 in response to the New York City Subway's state of emergency, a proposal that Mayor Bill de Blasio opposed. A commission to investigate the feasibility of congestion pricing, organized in late 2017, found that a congestion pricing scheme could benefit New York City.[108][109][110][111] Cuomo's congestion pricing plan was approved in March 2019, though congestion pricing in New York City would not go into effect until 2022 at the earliest. New York City's congestion pricing zone will be the first in North America.[112][113][114] The Federal Highway Administration gave its final approval on June 26, 2023, allowing the MTA to begin setting toll rates for the proposed congestion zone. The scheme is scheduled to begin in 2024.[115][116]

China edit
 
Severe air pollution in Beijing. Motor vehicle emissions account for 31% of the city's smog sources.[117]

In September 2011, local officials announced plans to introduce congestion pricing in Beijing. No details were provided regarding the magnitude of the congestion charges or the charge zone.[118] The measure was initially proposed in 2010 and was recommended by the World Bank.[119][120] A similar scheme was proposed for the city Guangzhou, Guangdong province, in early 2010. The city opened a public discussion on whether to introduce congestion charges. An online survey conducted by two local news outlets found that 84.4% of respondents opposed the charges.[120]

In December 2015, the Beijing Municipal Commission of Transport announced plans to introduce congestion charges in 2016. According to city's motor vehicle emission control plan 2013–2017, the congestion charge will be a real-time variable pricing scheme based on actual traffic flows and emissions data, and allow the fee to be charged for different vehicles and varying by time of the day and for different districts. The Dongcheng and Xicheng are among the districts that are most likely to firstly implement congestion charge. Vehicle emissions account for 31% of the city's smog sources, according to Beijing Environmental Protection Bureau. The local government has implemented already several policies to address air quality and congestion, such as a driving restriction scheme based upon the last digits on their license plates.[117][121] Also a vehicle quota system was introduced in 2011, awarding new car licenses through a lottery, with a ceiling of 6 million units set by the city authority for 2017.[122] In May 2016, the Beijing city legislature announced it will consider to start levying traffic congestion charges by 2020 as part of a package of measures to reform the vehicle quota system.[122] As of June 2016, the city's environmental and transport departments are working together on a congestion pricing proposal.[123]

Brazil edit
 
Traffic congestion on Marginal Pinheiros, near downtown São Paulo. According to Time magazine, São Paulo has the world's worst traffic jams.[124] Drivers are informed through variable message signs the prevailing queue length.

In January 2012, the federal government of Brazil enacted the Urban Mobility Law that authorizes municipalities to implement congestion pricing to reduce traffic flows. The law also seeks to encourage the use of public transportation and reduce air pollution. According to the law, revenues from congestion charges should be destined exclusively to urban infrastructure for public transportation and non-motorized modes of locomotion (such as walking and cycling), and to finance public subsidies to transit fares. The law went into effect in April 2013.[125][126][127]

In April 2012, one of the committees of the São Paulo city council approved a bill to introduce congestion pricing within the same area as the existing road space rationing (Portuguese: Rodízio veicular) by the last digit of the license plate, which has been in force 1996. The proposed charge is R$4 (~ US$2) per day and it is expected to reduce traffic by 30% and raise about R$2.5 billion (~ US$1.25 billion) per year, most of which will be destined to the expansion of the São Paulo Metro system and bus corridors. The bill still needs approval by two other committees before going for a final vote at the city council. Since 1995, 11 bills have been presented in the city council to introduce congestion pricing.[128] [129] Opinion surveys have shown that the initiative is highly umpopular. A survey by Veja magazine found that 80% of drivers are against congestion pricing, and another survey by Exame magazine found that only 1% of São Paulo's residents support the initiative, while 30% find that extending the metro system is a better solution to reduce traffic congestion.[130][131] São Paulo's strategic urban development plan "SP 2040", approved in November 2012, proposes the implementation of congestion pricing by 2025, when the density of metro and bus corridors is expected to reach 1.25 km/km2. The Plan also requires ample consultation and even a referendum before beginning implementation.[132]

Urban corridors and toll rings edit

 
"Costanera Norte" Freeway, crossing downtown with 100% free flow, Santiago, Chile

Congestion pricing has also been implemented in urban freeways. Between 2004 and 2005, Santiago de Chile implemented the first 100% non-stop urban toll for a freeway passing through a downtown area,[133] charging by the distance traveled.[134] Congestion pricing has been used since 2007 during rush hours in order to maintain reasonable speeds within the city core.[135][136]

Norway pioneered the implementation of electronic urban tolling in the main corridors of Norway's three major cities: Bergen (1986), Oslo (1990), and Trondheim (1991).[137] In Bergen cars can only enter the central area using a toll road, so that the effect is similar to a congestion charge. Though initially intended only to raise revenues to finance road infrastructure, the urban toll ring at Oslo created an unintended congestion pricing effect, as traffic decreased by around 5%. The Trondheim Toll Scheme also has congestion pricing effects, as charges vary by time of day. The Norwegian authorities pursued authorization to implement congestion charges in cities, and legislation was approved by Parliament in 2001.[138] In October 2011 the Norwegian government announced the introduction of rules allowing congestion charging in cities. The measure is intended to cut greenhouse gas and air pollutant emissions, and relief traffic congestion.[139] As of November 2015, Norwegian authorities have implemented urban charging schemes that operates both on the motorways and for access into downtown areas in five additional cities or municipalities: Haugesund, Kristiansand, Namsos, Stavanger, and Tønsberg.[140]

The Norwegian electronic toll collection system is called AutoPASS and is part of the joint venture EasyGo.

Single facilities edit

Urban edit

 
FasTrak HOT lanes at 91 Express Lanes, at Orange County, California.

Congestion pricing has also been applied to specific roadways.[141] The first of this kind of specific schemes allowed users of low or single-occupancy vehicles to use a high-occupancy vehicle lanes (HOV) if they pay a toll. This scheme is known as high-occupancy toll lanes (HOT) lanes, and it has been introduced mainly in the United States and Canada. The first practical implementations was California's private toll 91 Express Lanes, in Orange County in 1995, followed in 1996 by Interstate 15 in San Diego. There has been controversy over this concept, and HOT schemes have been called "Lexus" lanes, as critics see this new pricing scheme as a perk to the rich.[142][143][144] According to the Texas A&M Transportation Institute, by 2012 there were in the United States 722 corridor-miles of HOV lanes, 294 corridor-miles of HOT/Express lanes and 163 corridor-miles of HOT/Express lanes under construction.[145]

Congestion pricing in the form of variable tolls by time-of-the-day have also been implemented in bridges and tunnels providing access to the central business districts of several major cities. In most cases there was a toll already in existence. Dynamic pricing is relatively rare compared to variable pricing. One example of dynamic tolling is the Custis Memorial Parkway in the Washington, D.C., metro area, where at times of severe congestion tolls can reach almost US$50.[146] However, on average, round trip prices are much lower: $11.88 (2019), $5.04 (2020), $4.75 (2021).[147]

 
Variable tolls by time-of the-day were implemented on the Sydney Harbour Bridge in January 2009.

In March 2001, the Port Authority of New York and New Jersey (PANYNJ) implemented a discount on regular toll fees during off-peak hours for those vehicles paying electronically with an E-ZPass issued in New York State. These discount toll was implemented at several tunnels and bridges connecting New York City and New Jersey, including the George Washington Bridge, Lincoln Tunnel, and Holland Tunnel, and at some other bridges administered by PANYNJ.[148][149] Since March 2008, qualified low-emission automobiles with a fuel economy of at least 45 miles per gallon are eligible to receive a Port Authority Green Pass, which allows for a 50% discount during off-peak hours as compared to the regular full toll.[150]

In January 2009, variable tolls were implemented at Sydney Harbour Bridge, two weeks after upgrading to 100% free-flow electronic toll collection. The highest fees are charged during the morning and afternoon peak periods; a toll 25% lower applies for the shoulder periods; and a toll lower than the previously existing is charged at nights, weekends, and public holidays. This is Australia's first road congestion pricing scheme, and has had only a very minor effect on traffic levels, reducing them by 0.19%.[151][152][153][154]

In July 2010 congestion tolls were implemented at the San Francisco-Oakland Bay Bridge. The Bay Bridge congestion pricing scheme charges a US$6 toll from 5 a.m. to 10 a.m. and 3 p.m. to 7 p.m., Monday through Friday. During weekends cars pay US$5. The toll remained at the previous toll of US$4 at all other times on weekdays.[155] According to the Bay Area Toll Authority fewer users are driving during the peak hours and more vehicles are crossing the Bay Bridge before and after the 5–10 a.m. period in which the congestion toll goes into effect. The agency also reported that commute delays in the first six months have dropped by an average of 15 percent compared with 2009. When the congestion tolls were proposed, the agency expected the scheme to produce a 20 to 30 percent drop in commute traffic.[156]

Non-urban edit

Autoroute A1 in Northern France is one of the few cases of congestion pricing implemented outside of urban areas. This is an expressway connecting Paris to Lille, and since 1992 congestion prices have been applied during weekends with the objective of spreading demand on the trip back to Paris on Sunday afternoons and evenings.[157]

Research edit

Measurement of effects edit

In a road network, congestion can be considered a specific measure of the time delay in a journey or time lost through traffic jams. Delays can be caused by some combination of traffic density, road capacity, and the delaying effects of other road users and traffic management schemes such as traffic lights, junctions, and street works. This can be measured as the extra journey time needed to traverse a congested route when compared to the same route with no such interference. However, this technical definition of congestion as a measurement of delay can get confused and used interchangeably with traffic density in the public mind.[158]

To measure the true effects of any traffic management scheme it is normally necessary to establish a baseline, or "do nothing" case, which estimates the effects on the network without any changes other than normal trends and expected local changes. Notably this was not done for the London Congestion Charging Scheme, which has led to claims that it is not possible to determine the extent of the actual influence of the scheme.[159] Regardless of the scheme's impact, in a retrospective analysis Transport for London (TfL) estimated there would have already been a significant reduction in traffic as a consequence of parking policies and increased congestion due to traffic management and other interventions that had the effect of reducing highway capacity. In 2006, the last year before the zone was expanded, TfL observed that traffic flows were lower than in any recent year, while network traffic speeds were also lower than in any recent year.[160]

In 2013, ten years since its implementation, TfL reported that the congestion charging scheme resulted in a 10% reduction in traffic volumes from baseline conditions, and an overall reduction of 11% in vehicle kilometres in London between 2000 and 2012. Despite these gains, traffic speeds have also been getting progressively slower over the past decade, particularly in central London. TfL explains that the historic decline in traffic speeds is most likely due to interventions that have reduced the effective capacity of the road network in order to improve the urban environment, increase road safety and prioritise public transport, pedestrian and cycle traffic, as well as an increase in road works by utilities and general development activity since 2006. TfL concludes that while levels of congestion in central London are close to pre-charging levels, the effectiveness of the congestion charge in reducing traffic volumes means that conditions would be worse without the Congestion Charging scheme.[161]

Academic debate and concerns edit

Even the transport economists who advocate congestion pricing have anticipated several practical limitations, concerns and controversial issues regarding the actual implementation of this policy. As summarized by Cervero:[162]

"True social-cost pricing of metropolitan travel has proven to be a theoretical ideal that so far has eluded real-world implementation. The primary obstacle is that except for professors of transportation economics and a cadre of vocal environmentalists, few people are in favor of considerably higher charges for peak-period travel. Middle-class motorists often complain they already pay too much in gasoline taxes and registration fees to drive their cars, and that to pay more during congested periods would add insult to injury. In the United States, few politicians are willing to champion the cause of congestion pricing for fear of reprisal from their constituents. Critics also argue that charging more to drive is elitist policy, pricing the poor off of roads so that the wealthy can move about unencumbered. It is for all these reasons that peak-period pricing remains a pipe dream in the minds of many."

Both Button[163] and Small et al.,[12] have identified the following issues:

  • The real-world demand functions for urban road travel are more complex than the theoretical functions used in transport economics analysis. Congestion pricing was developed as a first-best solution, based on the assumption that the optimal price of road space equals the marginal cost price if all other goods in the economy are also marginal cost priced. In the real world this is not true, thus, actual implementation of congestion pricing is just a proxy or second-best solution. Based on the economic principles behind congestion pricing, the optimal congestion charge should make up for the difference between the average cost paid by the driver and the marginal cost imposed on other drivers (such as extra delay) and on society as a whole (such as air pollution). The practical challenge of setting optimal link-based tolls is daunting given that neither the demand functions nor the link-specific speed-flow curves can be known precisely. Therefore, transport economists recognize that in practice setting the right price for the congestion charge becomes a trial and error experience.
  • Inequality issue: A main concern is the possibility of undesirable distribution repercussions because of the diversity of road users. The use of the tolled road depends on the user's level of income. Where some cannot afford to pay the congestion charge, then this policy is likely to privilege the middle-class and rich. The users who shift to some less-preferred alternative are also worse off. The less wealthy are the more likely to switch to public transit. Road space rationing is another strategy generally viewed as more equitable than congestion pricing. However, high-income users can always avoid the travel restrictions by owning a second car and users with relatively inelastic demand (such as a worker who needs to transport tools to a job site) are relatively more impacted.[164]
  • There are difficulties in deciding how to allocate the revenues raised. This is a controversial issue among scholars. The revenues can be used to improve public transport (as is the case in London), or to invest in new road infrastructure (as in Oslo). Some academics make the case that revenues should be disposed as a direct transfer payments to former road users. Congestion pricing is not intended to increase public revenues or to become just another tax, however this is precisely one of the main concerns of road users and taxpayers.

One alternative, aimed at avoiding inequality and revenue allocation issues, is to implement a rationing of peak period travel through mobility rights or revenue-neutral credit-based congestion pricing.[165] This system would be similar to the existing emissions trading of carbon credit. Metropolitan area or city residents, or the taxpayers, would be issued mobility rights or congestion credits, and would have the option of using these for themselves, or trading or selling them to anyone willing to continue traveling by automobile beyond their personal quota. This trading system would allow direct benefits to be accrued by those users shifting to public transportation or by those reducing their peak-hour travel rather than the government.[166][167]

Public controversy edit

Experience from the few cities where congestion pricing has been implemented shows that social and political acceptability is key. Public discontent with congestion pricing, or rejection of congestion pricing proposals, is due mainly to the inequality issues, the economic burden on neighboring communities, the effect on retail businesses and the economic activity in general, and the fears that the revenues will become just another tax.

Congestion pricing remains highly controversial with the public both before and after implementation. This has in part been resolved through referendums, such as after the seven-month trial period in Stockholm;[168] however this creates a debate as to where the border line for the referendum should go, since it is often the people living outside the urban area who have to pay the tax, while the external benefit is granted to those who live within the area. In Stockholm there was a majority in the referendum within the city border (where the votes counted), but not outside.[169][170]

Some concerns have also been expressed regarding the effects of cordon area congestion pricing on economic activity and land use,[171] as the benefits are usually evaluated from the urban transportation perspective only. However, congestion pricing schemes have been used with the main objective of improving urban quality and to preserve historical heritage in the small cities.[72][172]

The effects of a charge on business have been disputed; reports have shops and businesses being heavily impacted by the cost of the charge, both in terms of lost sales and increased delivery costs in London,[173] while others show that businesses were then supporting the charge six months after implementation.[174] Reports show business activity within the charge zone had been higher in both productivity and profitability and that the charge had a "broadly neutral impact" on the London wide economy,[175] while others claim an average drop in business of 25% following the 2007 extension.[176]

Other criticism has been raised concerning the environmental effects on neighborhoods bordering the congestion zone, with critics claiming that congestion pricing would create "parking lots" and add more traffic and pollution to those neighborhoods,[177] and the imposition of a regressive tax on some commuters.[178][179] Stockholm's trial of congestion pricing, however, showed a reduction in traffic in areas outside the congestion zone.[180] Other opponents argue that the pricing could become a tax on middle- and lower-class residents, since those citizens would be affected the most financially.[181] The installation of cameras for tracking purposes may also raise civil liberties concerns.[182][183]

Effects edit

A 2019 study of congestion pricing in Stockholm between 2006 and 2010 found that in the absence of congestion pricing that Stockholm's air would have been five to 15 percent more polluted between 2006 and 2010", and that young children would have suffered substantially more asthma attacks.[184][3] A 2020 study that analyzed driving restrictions in Beijing estimated that the implementation of congestion pricing would reduce total traffic, increase traffic speed, reduce pollution, reduce greenhouse gas emissions, reduce traffic accidents, and increase tax revenues.[185] A 2020 study of London found that congestion pricing (introduced in 2003) led to reductions in pollution and reductions in driving, but it increased pollution [186]from diesel vehicles (which were exempt from the congestion pricing).[187] A 2021 study found that congestion pricing reduced CO2 emissions through downsizing commuting distances and housing sizes.[2]

A 2013 study found that after congestion pricing was implemented in Seattle, drivers reported greater satisfaction with the routes covered by congestion pricing and reported lower stress.[188][189]

A 2016 study found that more people used public transportation due to increases in congestion pricing in Singapore.[190] A 2016 study found that real estate prices dropped by 19% within the cordoned-off areas of Singapore where congestion pricing was in place relative to the areas outside of the area.[191]

Waterways edit

Panama Canal booking system and auction edit

 
Several dozen vessels queuing at the Pacific Ocean waiting to enter the Panama Canal.
 
Vessels waiting at the Gatun Lake to cross the Gatun Locks to exit the canal at the Atlantic side

The Panama Canal had a limited capacity determined by operational times and cycles of the existing locks and further constrained by the current trend towards larger (close to Panamax-sized) vessels transiting the canal which take more transit time within the locks and navigational channels, and the need for permanent periodical maintenance works due to the aging canal, which forces periodical shutdowns of this waterway. On the other hand, demand has been growing due to the rapid growth of international trade. Also, many users require a guarantee of certain level of service. Despite the gains which have been made in efficiency, the Panama Canal Authority (ACP) estimates that the canal will reach its maximum sustainable capacity between 2009 and 2012.[192] The long-term solution for the congestion problems was the expansion of the canal through a new third set of locks. Work started in 2007 and the expanded canal enter commercial operation in June 2016. The new locks allow transit of larger, Post-Panamax ships, which have a greater cargo capacity than the current locks are capable of handling.[193]

Considering the high operational costs of the vessels (container ships have daily operational costs of approximately US$40,000), the long queues that occur during the high season (sometimes up to a week's delay), and the high value of some of the cargo transported through the canal, the ACP implemented a congestion pricing scheme to allow a better management of the scarce capacity available and to increase the level of service offered to the shipping companies. The scheme gave users two choices: (1) transit by order of arrival on a first-come first-served basis, as the canal historically has operated or (2) booked service for a fee—a congestion charge.

The booked service allowed two options of fees. The Transit Booking System, available online, allowing customers who do not want to wait in queue to pay an additional 15% over the regular tolls, guaranteeing a specific day for transit and crossing the canal in 18 hours or less. ACP sells 24 of these daily slots up to 365 days in advance. The second choice was high priority transit. Since 2006, ACP has available a 25th slot, sold through the Transit Slot Auction to the highest bidder.[194] The main customers of the Transit Booking System are cruise ships, container ships, vehicle carriers, and non-containerized cargo vessels.[195]

The highest toll for high priority passage paid through the Transit Slot Auction was US$220,300 charged on a tanker in August 2006,[196] bypassing a 90-ship queue awaiting the end of maintenance works on the Gatun locks, thus avoiding a seven-day delay. The normal fee would have been just US$13,430.[197] The average regular toll is around US$54,000.

Airports edit

 
New York's John F. Kennedy International Airport, one of the world's busiest

Many airports are facing extreme congestion, runway capacity being the scarcest resource. Congestion pricing schemes have been proposed to mitigate this problem, including slot auctions, such as with the Panama Canal, but implementation has been piecemeal.[198][199][200] The first scheme was started in 1968 when higher landing fees for peak-hour use by aircraft with 25 seats or less at Newark, Kennedy, and LaGuardia airports in New York City. As a result of the higher charges, general aviation activity during peak periods decreased by 30%. These fees were applied until deregulation of the industry, but higher fees for general aviation were kept to discourage this type of operations at New York's busiest airports. In 1988 a higher landing fee for smaller aircraft at Boston's Logan Airport was adopted; with this measure much of the general aviation abandoned Logan for secondary airports.[201] In both US cases the pricing scheme was challenged in court. In the case of Boston, the judge ruled in favor of general aviation users due to lack of alternative airports. In the case of New York, the judge dismissed the case because "the fee was a justified means of relieving congestion".[202]

Congestion pricing has also been implemented for scheduled airline services. The British Airports Authority (BAA) has been a pioneer in implementing congestion pricing for all types of commercial aviation. In 1972 implemented the first peak pricing policy, with surcharges varying depending on the season and time of the day, and by 1976 raised these peak charges. London-Heathrow had seven pricing structures between 1976 and 1984. In this case it was the US carriers that went to international arbitration in 1988 and won their case.[202]

In 1991, the Athens Airport charged a 25% higher landing fee for those aircraft arriving between 11:00 and 17:00 during the high tourism season during summer. Hong Kong charges an additional flat fee to the basic weight charge.[203] In 1991–92 peak pricing at London's main airports Heathrow, Gatwick and Stansted was implemented; airlines were charged different landing fees for peak and off-peak operations depending on the weight of aircraft.[204] For example, in the case of a Boeing 757, the peak landing fee was about 2.5 times higher than the off-peak fee in all three airports. For a Boeing 747 the differential was even higher, as the old 747 carries a higher noise charge.[205] Though related to runway congestion, the main objective of these peak charges at the major British airports was to raise revenue for investment.

See also edit

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Bibliography edit

  • Button, Kenneth J. (2010). Transport Economics 3rd Edition. Edward Elgar Publishing, Cheltenham, UK. ISBN 978-1-84064-191-2. (See Chapter 9: Optimizing Traffic Congestion)
  • Button, Kenneth J. (1993). Transport Economics 2nd Edition. Edward Elgar Publishing Ltd, Cheltenham, UK. ISBN 978-1-85278-523-9.
  • Cervero, Robert (1998). The Transit Metropolis: A Global Inquiry. Island Press, Washington, D.C. ISBN 978-1-55963-591-2. (See Chapter 6: The Master-Planned Transit Metropolis: Singapore)
  • Davis, Alexander; Long, Geoffrey M. (2012). Congestion Pricing - A Primer On Efficient Road Management. Nova Science Publishers, New York. ISBN 978-1-62081-480-2.
  • Doganis, R. (1992). The Airport Business. Routledge, London. ISBN 978-0-415-08117-7.
  • McDonald, J.F.; d'Ouville, Edmond L.; Nan Liu, Louie (1999). Economics of Urban Highway Congestion and Pricing (Transportation Research, Economics and Policy Volume 9). Springer, New York. ISBN 978-0-7923-8631-5.
  • International Transport Forum, Organisation for Economic Co-operation and Development (2010). ITF Round Tables Implementing Congestion Charges. OECD Publishing, Paris. ISBN 978-92-821-0284-8.
  • Kockelman, Kara M.; Kalmanje, Sukumar (2005). "Credit-Based Congestion Pricing: A Policy Proposal and the Public's Response". Transportation Research. 39A (7–9): 671–690. doi:10.1016/j.tra.2005.02.014.
  • Peterson, Sarah Jo; MacCleery, Rachel (2013). When the Road Price Is Right: Land Use, Tolls, and Congestion Pricing. Urban Land Institute. ISBN 978-0-87420-262-5.
  • Richardson, Harry W.; Chang-Hee, Christine Bae (2008). Road Congestion Pricing In Europe: Implications for the United States. Edward Elgar Publishing, Cheltenham, UK; Northampton, MA. ISBN 978-1-84720-380-9.
  • Santos, Georgina, ed. (2004). Road Pricing, Volume 9: Theory and Evidence (Research in Transportation Economics). JAI Press. ISBN 978-0-7623-0968-9.
  • Schade, Jens; Schlag, Bernhard (2003). Acceptability of Transport Pricing Strategies. Emerald Group Publishing, Bingley, West Yorkshire. ISBN 978-0-08-044199-3.
  • Small, Kenneth A.; Verhoef, Erik T. (2007). The Economics of Urban Transportation. Routledge, New York. ISBN 978-0-415-28515-5. (See Chapter 4: Pricing and 4-3: Congestion Pricing in Practice)
  • Smeed, R.J. (1964). Road pricing: the economic and technical possibilities. HMSO.
  • Tsekeris, Theodore; Voß, Stefan (2009). "Design and evaluation of road pricing: State-of-the-art and methodological advances". Netnomics. 10: 5–52. doi:10.1007/s11066-008-9024-z. S2CID 153724717.
  • Verhoef, Erik T.; Bliemer, Michiel; Steg, Linda; Van Wee, Bert (2008). Pricing in Road Transport: A Multi-Disciplinary Perspective. Edward Elgar Publishing, Cheltenham, UK. ISBN 978-1-84542-860-0.
  • Walters, A. A. (1968). The Economics of Road User Charges. World Bank Staff Occasional Papers Number Five, Washington, D.C. ISBN 978-0-8018-0653-7.

External links edit

  •   Transportation Economics/Pricing at Wikibooks

January 01, 1970
congestion, pricing, this, article, about, traffic, congestion, pricing, other, types, congestion, pricing, dynamic, pricing, variable, pricing, broader, concept, direct, charges, paid, road, users, road, pricing, congestion, charges, system, surcharging, user. This article is about traffic congestion pricing For other types of congestion pricing see Dynamic pricing and Variable pricing For the broader concept of direct charges paid by road users see Road pricing Congestion pricing or congestion charges is a system of surcharging users of public goods that are subject to congestion through excess demand such as through higher peak charges for use of bus services electricity metros railways telephones and road pricing to reduce traffic congestion airlines and shipping companies may be charged higher fees for slots at airports and through canals at busy times Advocates claim this pricing strategy regulates demand making it possible to manage congestion without increasing supply Electronic Road Pricing gantry in Singapore the first place in the world to implement an urban cordon area congestion pricing scheme According to the economic theory behind congestion pricing the objective of this policy is to use the price mechanism to cover the social cost of an activity where users otherwise do not pay for the negative externalities they create such as driving in a congested area during peak demand By setting a price on an over consumed product congestion pricing encourages the redistribution of the demand in space or in time leading to more efficient outcomes Singapore was the first country to introduce congestion pricing on its urban roads in 1975 and was refined in 1998 Since then it has been implemented in cities such as London Stockholm Milan and Gothenburg It has also been proposed in San Francisco and will be implemented in New York City in June 2024 Greater awareness of the harms of pollution and emissions of greenhouse gases in the context of climate change has recently created greater interest in congestion pricing Implementation of congestion pricing has reduced congestion in urban areas 1 reduced pollution 2 reduced asthma 3 and increased house values 4 but has also sparked criticism and public discontent Critics maintain that congestion pricing is not equitable places an economic burden on neighboring communities and adversely affects retail businesses and general economic activity There is a consensus among economists that congestion pricing in crowded transportation networks and subsequent use of the proceeds to lower other taxes makes the average citizen better off 5 Economists disagree over how to set tolls how to cover common costs what to do with any excess revenues whether and how losers from tolling previously free roads should be compensated and whether to privatize highways 6 Four general types of systems are in use a cordon area around a city center with charges for passing the cordon line area wide congestion pricing which charges for being inside an area a city center toll ring with toll collection surrounding the city and corridor or single facility congestion pricing where access to a lane or a facility is priced Contents 1 Description 2 Roads 2 1 Cordon area and area wide 2 1 1 Singapore 2 1 2 London 2 1 3 Milan 2 1 4 Stockholm 2 1 5 Norway 2 1 6 Old town centres 2 1 7 Rejected proposals 2 1 8 Current proposals 2 1 8 1 United States 2 1 8 2 China 2 1 8 3 Brazil 2 2 Urban corridors and toll rings 2 3 Single facilities 2 3 1 Urban 2 3 2 Non urban 2 4 Research 2 4 1 Measurement of effects 2 4 2 Academic debate and concerns 2 4 3 Public controversy 2 5 Effects 3 Waterways 3 1 Panama Canal booking system and auction 4 Airports 5 See also 6 References 7 Bibliography 8 External linksDescription editCongestion pricing is a concept from market economics regarding the use of pricing mechanisms to charge the users of public goods for the negative externalities generated by the peak demand in excess of available supply Its economic rationale is that at a price of zero demand exceeds supply causing a shortage and that the shortage should be corrected by charging the equilibrium price rather than shifting it down by increasing the supply Usually this means increasing prices during certain periods of time or at the places where congestion occurs or introducing a new usage tax or charge when peak demand exceeds available supply in the case of a tax funded public good provided free at the point of usage nbsp Economic rationale for moving from untolled equilibrium to congestion pricing equilibrium According to the economic theory behind congestion pricing the objective of this policy is the use of the price mechanism to make users more aware of the costs that they impose upon one another when consuming during the peak demand and that they should pay for the additional congestion they create thus encouraging the redistribution of the demand in space or in time 7 8 or shifting it to the consumption of a substitute public good for example switching from private transport to public transport This pricing mechanism has been used in several public utilities and public services for setting higher prices during congested periods as a means to better manage the demand for the service and whether to avoid expensive new investments just to satisfy peak demand or because it is not economically or financially feasible to provide additional capacity to the service Congestion pricing has been widely used by telephone and electric utilities metros railways and autobus services 9 and has been proposed for charging internet access 10 It also has been extensively studied and advocated by mainstream transport economists for ports waterways airports and road pricing though actual implementation is rather limited due to the controversial issues subject to debate regarding this policy particularly for urban roads such as undesirable distribution effects the disposition of the revenues raised and the social and political acceptability of the congestion charge 11 12 nbsp An introductory flowchart describing congestion pricing Congestion pricing is one of a number of alternative demand side as opposed to supply side strategies offered by economists to address traffic congestion 13 Congestion is considered a negative externality by economists 14 An externality occurs when a transaction causes costs or benefits to a third party often although not necessarily from the use of a public good for example if manufacturing or transportation cause air pollution imposing costs on others when making use of public air Congestion pricing is an efficiency pricing strategy that requires the users to pay more for that public good thus increasing the welfare gain or net benefit for society 15 16 Nobel laureate William Vickrey is considered by some to be the father of congestion pricing as he first proposed adding a distance or time based fare system for the New York City Subway in 1952 17 18 19 In the road transportation arena these theories were extended by Maurice Allais Gabriel Roth who was instrumental in the first designs and upon whose World Bank recommendation the first system was put in place in Singapore 20 Also it was considered by the Smeed Report published by the British Ministry of Transport in 1964 21 but its recommendations were rejected by successive British governments 22 The transport economics rationale for implementing congestion pricing on roads described as one policy response to the problem of congestion was summarized in testimony to the United States Congress Joint Economic Committee in 2003 congestion is considered to arise from the mispricing of a good namely highway capacity at a specific place and time The quantity supplied measured in lane miles is less than the quantity demanded at what is essentially a price of zero If a good or service is provided free of charge people tend to demand more of it and use it more wastefully than they would if they had to pay a price that reflected its cost Hence congestion pricing is premised on a basic economic concept charge a price in order to allocate a scarce resource to its most valuable use as evidenced by users willingness to pay for the resource 23 Roads editFor broader coverage of this topic see Road pricing Practical implementations of road congestion pricing are found almost exclusively in urban areas because traffic congestion is common in and around city centers Congestion pricing can be fixed the same at all times of day and days of the week variable set in advance to be higher at typically high traffic times or dynamic varying according to actual conditions As congestion pricing has been increasing worldwide the schemes implemented have been classified into four different types cordon area around a city center area wide congestion pricing city center toll ring and corridor or single facility congestion pricing 24 Cordon area and area wide edit See also Electronic Road Pricing Singapore London congestion charge Stockholm congestion tax Ecopass Milan Area C and Gothenburg congestion tax nbsp At Old Street street markings and a sign inset with the white on red C alert drivers to the congestion charge London Cordon area congestion pricing is a fee or tax paid by users to enter a restricted area usually within a city center as part of a demand management strategy to relieve traffic congestion within that area 25 The economic rationale for this pricing scheme is based on the externalities or social costs of road transport such as air pollution noise traffic accidents environmental and urban deterioration and the extra costs and delays imposed by traffic congestion upon other drivers when additional users enter a congested road 26 nbsp Rome s Traffic Limited Zone ZTL entry control point with automatic surveillance The first implementation of such a scheme was Singapore Area Licensing Scheme in 1975 together with a comprehensive package of road pricing measures stringent car ownership rules and improvements in mass transit 27 28 Thanks to technological advances in electronic toll collection electronic detection and video surveillance technology collecting congestion fees has become easier Singapore upgraded its system in 1998 29 and similar pricing schemes were implemented in Rome in 2001 30 London in 2003 with extensions in 2007 Stockholm in 2006 as a seven month trial and then on a permanent basis 31 In January 2008 Milan began a one year trial program called Ecopass charging low emission standard vehicles and exempting cleaner and alternative fuel vehicles 32 33 34 The Ecopass program was extended until December 31 2011 35 36 and on January 16 2012 was replaced by Area C a trial program that converted the scheme from a pollution charge to a congestion charge 37 The Gothenburg congestion tax was implemented in January 2013 and it was modeled after the Stockholm scheme 38 nbsp Trangselskatt automatic control point at Ropsten Stockholm The sign on the right informs the drivers about the different fees which vary depending on the time of the day Singapore and Stockholm charge a congestion fee every time a user crosses the cordon area while London charges a daily fee for any vehicle driving in a public road within the congestion charge zone regardless of how many times the user crosses the cordon 39 Stockholm has put a cap on the maximum daily tax 40 while in Singapore the charge is based on a pay as you use principle and rates are set based on traffic conditions at the pricing points and reviewed on a quarterly basis Through this policy the Land Transport Authority LTA reports that the electronic road pricing has been effective in maintaining an optimal speed range of 45 to 65 km h for expressways and 20 to 30 km h for arterial roads 41 Singapore edit Main article Electronic Road Pricing nbsp Automatic tolling gantry of Singapore s Electronic Road Pricing scheme In an effort to improve the pricing mechanism and to introduce real time variable pricing 42 Singapore s LTA together with IBM ran a pilot from December 2006 to April 2007 with a traffic estimation and prediction tool TrEPS which uses historical traffic data and real time feeds with flow conditions from several sources in order to predict the levels of congestion up to an hour in advance By accurately estimating prevailing and emerging traffic conditions this technology is expected to allow variable pricing together with improved overall traffic management including the provision of information in advance to alert drivers about conditions ahead and the prices being charged at that moment 43 44 In 2010 the Land Transport Authority began exploring the potential of Global Navigation Satellite System as a technological option for a second generation ERP LTA objective is to evaluate if the latest technologies available in the market today are accurate and effective enough for use as a congestion charging tool especially taking into consideration the dense urban environment in Singapore Implementation of such system is not expected in the short term 45 London edit Main article London congestion chargeThis section needs to be updated The reason given is https www theguardian com uk news 2022 jan 11 london mayor pollution health threat pandemic shift to driving Please help update this article to reflect recent events or newly available information January 2022 This section may contain an excessive amount of intricate detail that may interest only a particular audience Please help by spinning off or relocating any relevant information and removing excessive detail that may be against Wikipedia s inclusion policy January 2022 Learn how and when to remove this message A proposal by former Mayor of London Ken Livingstone would have resulted in a new pricing structure based on potential CO2 emission rates by October 2008 46 The goal was that vehicles with the very lowest CO2 emission rates would be exempted and those with higher emission rates would pay a new higher charge of 25 with the rest paying the same charge they pay today 47 However Livingstone s successor as Mayor of London Boris Johnson announced at the beginning of his administration that he would reform the congestion charge 48 nbsp Entrance to the London Congestion Charge zone Shown traffic sign and the CCTV used to control vehicles entering the zone s boundary Johnson announced in July 2008 that the new CO2 charging structure will no longer be implemented 49 Among other reasons he said the environmental charge would encourage travel by thousands of smaller vehicles free of charge resulting in increased congestion and pollution 49 50 He also discarded plans for extending the charge zone to the suburbs and announced he will review the western extension implemented in 2007 based on a public consultation planned for September 2008 51 Having held a five week public consultation with residents in the autumn of 2008 Johnson decided to remove the 2007 Western Extension from the congestion charging zone beginning on January 4 2011 to increase the basic charge to 10 and also to introduce an automated payment system called Congestion Charging Auto Pay CC Auto Pay which will charge vehicles based on the number of charging days a vehicle travels within the charging zone each month and the drivers of these vehicles will pay a reduced 9 daily charge 52 In November 2012 Transport for London TfL presented a proposal to abolish the Greener Vehicle Discount that benefited among others vehicles with small diesel engines that avoid the charge because their engines produce emissions of less than 100g per km of CO2 53 Approved by Mayor Boris Johnson in April 2013 the Ultra Low Emission Discount ULED went into effect on 1 July 2013 The ULED introduced more stringent emission standards that limit the free access to the congestion charge zone to all electric cars some plug in hybrids and any car or van that emits 75g km or less of CO2 and meets the Euro 5 emission standards for air quality The measure was designed to curb the growing number of diesel vehicles on London s roads About 20 000 owners of vehicles registered for the Greener Vehicle Discount by June 2013 were granted a three year sunset period before they have to pay the full congestion charge 54 55 56 The sunset period ended on 24 June 2016 57 Since the congestion charge introduction in 2003 over 1 2 billion has been invested in transport through December 2013 including 960 million on improvements to the bus network 102 million on roads and bridges 70 million on road safety 51 million on local transport borough plans and 36 million on sustainable transport and the environment 58 There has been criticism because during the first ten years since the scheme was implemented gross revenue reached about 2 6 billion but only 1 2 billion has been invested meaning that 54 of gross revenues have been spent in operating the system and administrative expenses 59 In June 2014 the standard charge was raised 15 from 10 per day to 11 50 60 According to TfL the objective of the increase is to recoup inflation over the previous three years and ensure the charge remains an effective deterrent to making unnecessary journeys in central London 61 A new toxicity charge known as T charge was introduced from 23 October 2017 Older and more polluting cars and vans that do not meet Euro 4 standards will have to pay an extra 10 charge on top of the 11 50 congestion charge to drive in central London within the Congestion Charge Zone CCZ The charge typically applies to diesel and petrol vehicles registered before 2006 and the levy is expected to affect up to 10 000 vehicles 62 63 London Mayor Sadiq Khan announced the introduction of the scheme in February 2017 after London achieved record air pollution levels the previous month and the city was put on very high pollution alert for the first time ever as cold and stationary weather failed to clear toxic pollutants emitted mainly by diesel vehicles 64 On 8 April 2019 the T charge was expanded into the Ultra Low Emission Zone ULEZ 65 nbsp Entrance to Milan Area C Milan edit Main articles Ecopass and Milan Area C The Ecopass pollution charge ended on December 31 2011 and was replaced by the Area C scheme which went into effect on January 16 2012 initially as an 18 month pilot program The Area C scheme is a conventional congestion pricing scheme and is based on the same Ecopass geographic area Vehicles entering the charging zone incur a charge of 5 regardless of their pollution level However residents inside the area have 40 free entries per year and then a discounted charge of 2 37 66 67 Electric vehicles public utility vehicles police and emergency vehicles buses and taxis are exempted from the charge Hybrid electric and bi fuel natural gas vehicles CNG and LPG were exempted until January 1 2013 Exemption has been postponed until December 31 2016 67 The scheme was made permanent in March 2013 All net earnings from Area C are invested to promote sustainable mobility and policies to reduce air pollution including the redevelopment protection and development of public transport soft mobility pedestrians cycling Zone 30 and systems to rationalize the distribution of goods 68 Stockholm edit Main article Stockholm congestion tax nbsp Automatic detection system at Stockholm s first electronic gantry at Lilla Essingen On 1 January 2016 congestion taxes were increased in the inner city parts of Stockholm and also the congestion tax was introduced on Essingeleden motorway This was the first increase of the tax since it was introduced permanently in 2007 69 70 The congestion tax is being introduced at the access and exit ramps of two interchanges on Essingeleden in order to reduce traffic jams in peak periods and with shorter traffic jams on Essingeleden the surrounding roads are expected to have shorter tailbacks The transport agencies involved expected to reduce traffic on Essingeleden by some 10 in peak hours 69 One week after the tax began to be charged traffic on the motorway had decreased by 22 compared to a normal day in mid December 70 The tax increase was implemented not only to improve accessibility and the environment but also to help develop the infrastructure The additional funds will contribute to finance the extension of the Stockholm metro 69 As the Stockholm congestion tax varies by time of the day the highest increase took place at the two busiest rush hour periods 7 30 to 8 29 and 16 00 to 17 29 from SEK 20 to SEK 30 The objective was to steer the traffic towards other times of the day and public transport and in this way reduce congestion in the Inner City area Also the maximum amount levied was raised to SEK 105 per day and vehicle 69 Norway edit See also Toll roads in Norway Several cities in Norway have tolled entrances to the more central urban areas the first being Bergen in 1986 Starting with Trondheim in 2010 later in Kristiansand Bergen and Oslo time differing fees were introduced so that rush hours in Oslo 06 30 09 00 and 15 00 17 00 cost more The price is in 2020 typically NOK 28 2 37 per passage but to enter Oslo to the inner city and leave means passing five stations which costs NOK 126 10 66 Old town centres edit See also Durham City congestion charge Around Europe several relatively small cities such as Durham England 71 Znojmo Czech Republic 72 Riga Latvia 73 and Valletta Malta 74 75 have implemented congestion pricing to reduce traffic crowding parking problems and pollution particularly during the peak tourism season Durham introduced charges in October 2002 reducing vehicle traffic by 85 after a year prior to this 3 000 daily vehicles had shared the streets with 17 000 pedestrians 76 Valletta has reduced daily vehicles entering the city from 10 000 to 7 900 making 400 readily available parking places in the center There has been a 60 drop in car stays by non residents of more than eight hours but there has been a marked increase of 34 in non residential cars visiting the city for an hour or less 75 77 Rejected proposals edit nbsp The New York City congestion pricing proposal was rejected by the New York State Legislature in 2008 but later approved in 2019 nbsp A map of Greater Manchester highlighting area of the rejected congestion charging scheme See also Congestion charging in Greater Manchester Edinburgh congestion charge Electronic Road Pricing Hong Kong and New York congestion pricing Hong Kong conducted a pilot test on an electronic congestion pricing system between 1983 and 1985 with positive results 78 However public opposition against this policy stalled its permanent implementation In 2002 Edinburgh United Kingdom initiated an implementation process a referendum was conducted in 2005 79 with a majority of 74 4 rejecting the proposal 80 81 Councils from across the West Midlands in the United Kingdom including Birmingham and Coventry rejected the idea of imposing congestion pricing schemes on the area in 2008 despite promises from central government of transport project funding in exchange for the implementation of a road pricing pilot scheme 82 In 2007 New York City shelved a proposal for a three year pilot program for implementation in Manhattan 18 83 84 85 and a new proposition was denied in 2008 86 with potential federal grants of US 354 million being reallocated to other American cities 87 88 Greater Manchester United Kingdom was considering a scheme with two cordons one covering the main urban core of the Greater Manchester Urban Area and another covering the Manchester city centre 89 90 91 The measure was supported by the government 92 but three local authorities rejected it Bury Trafford and Stockport the support of two thirds of Manchester s 10 local councils was needed for it to be implemented 93 A comprehensive transport investment package for Manchester which included the congestion pricing element was released for further public consultation and was to be subject of a referendum in December 2008 94 On 12 December 2008 the scheme was overwhelmingly rejected by 10 out of 10 councils by a public referendum 95 Current proposals edit See also San Francisco congestion pricing and Congestion pricing in New York City nbsp Traffic entering San Francisco through the Golden Gate Bridge United States edit In August 2007 the United States Department of Transportation selected five metropolitan areas to initiate congestion pricing demonstration projects under the Urban Partnerships Congestion Initiative for US 1 billion of federal funding 96 The five projects under this initiative are Golden Gate Bridge in San Francisco 97 State Route 520 serving downtown Seattle and communities to its east 98 Interstate 95 between Miami and Ft Lauderdale 99 Interstate 35W serving downtown Minneapolis 100 and a variable rate parking meter system in Chicago plus Metro ExpressLanes in Los Angeles County which replaced New York City after it left the program in 2008 101 San Francisco transport authorities began a feasibility study in 2006 to evaluate the introduction of congestion pricing 102 103 The charge would be combined with other traffic reduction implementations allowing money to be raised for public transit improvements and bike and pedestrian enhancements 104 The initial pricing scenarios were presented in public meetings conducted in December 2008 105 and the final study results were announced in November 2010 proposing modified alternatives based on the public s feedbacks and the updated proposal calls for implementing a six month to one year trial in 2015 106 107 needs update Governor Andrew Cuomo reintroduced a congestion pricing proposal for New York City in 2017 in response to the New York City Subway s state of emergency a proposal that Mayor Bill de Blasio opposed A commission to investigate the feasibility of congestion pricing organized in late 2017 found that a congestion pricing scheme could benefit New York City 108 109 110 111 Cuomo s congestion pricing plan was approved in March 2019 though congestion pricing in New York City would not go into effect until 2022 at the earliest New York City s congestion pricing zone will be the first in North America 112 113 114 The Federal Highway Administration gave its final approval on June 26 2023 allowing the MTA to begin setting toll rates for the proposed congestion zone The scheme is scheduled to begin in 2024 115 116 China edit nbsp Severe air pollution in Beijing Motor vehicle emissions account for 31 of the city s smog sources 117 In September 2011 local officials announced plans to introduce congestion pricing in Beijing No details were provided regarding the magnitude of the congestion charges or the charge zone 118 The measure was initially proposed in 2010 and was recommended by the World Bank 119 120 A similar scheme was proposed for the city Guangzhou Guangdong province in early 2010 The city opened a public discussion on whether to introduce congestion charges An online survey conducted by two local news outlets found that 84 4 of respondents opposed the charges 120 In December 2015 the Beijing Municipal Commission of Transport announced plans to introduce congestion charges in 2016 According to city s motor vehicle emission control plan 2013 2017 the congestion charge will be a real time variable pricing scheme based on actual traffic flows and emissions data and allow the fee to be charged for different vehicles and varying by time of the day and for different districts The Dongcheng and Xicheng are among the districts that are most likely to firstly implement congestion charge Vehicle emissions account for 31 of the city s smog sources according to Beijing Environmental Protection Bureau The local government has implemented already several policies to address air quality and congestion such as a driving restriction scheme based upon the last digits on their license plates 117 121 Also a vehicle quota system was introduced in 2011 awarding new car licenses through a lottery with a ceiling of 6 million units set by the city authority for 2017 122 In May 2016 the Beijing city legislature announced it will consider to start levying traffic congestion charges by 2020 as part of a package of measures to reform the vehicle quota system 122 As of June 2016 update the city s environmental and transport departments are working together on a congestion pricing proposal 123 Brazil edit nbsp Traffic congestion on Marginal Pinheiros near downtown Sao Paulo According to Time magazine Sao Paulo has the world s worst traffic jams 124 Drivers are informed through variable message signs the prevailing queue length In January 2012 the federal government of Brazil enacted the Urban Mobility Law that authorizes municipalities to implement congestion pricing to reduce traffic flows The law also seeks to encourage the use of public transportation and reduce air pollution According to the law revenues from congestion charges should be destined exclusively to urban infrastructure for public transportation and non motorized modes of locomotion such as walking and cycling and to finance public subsidies to transit fares The law went into effect in April 2013 125 126 127 In April 2012 one of the committees of the Sao Paulo city council approved a bill to introduce congestion pricing within the same area as the existing road space rationing Portuguese Rodizio veicular by the last digit of the license plate which has been in force 1996 The proposed charge is R 4 US 2 per day and it is expected to reduce traffic by 30 and raise about R 2 5 billion US 1 25 billion per year most of which will be destined to the expansion of the Sao Paulo Metro system and bus corridors The bill still needs approval by two other committees before going for a final vote at the city council Since 1995 11 bills have been presented in the city council to introduce congestion pricing 128 129 Opinion surveys have shown that the initiative is highly umpopular A survey by Veja magazine found that 80 of drivers are against congestion pricing and another survey by Exame magazine found that only 1 of Sao Paulo s residents support the initiative while 30 find that extending the metro system is a better solution to reduce traffic congestion 130 131 Sao Paulo s strategic urban development plan SP 2040 approved in November 2012 proposes the implementation of congestion pricing by 2025 when the density of metro and bus corridors is expected to reach 1 25 km km2 The Plan also requires ample consultation and even a referendum before beginning implementation 132 Urban corridors and toll rings edit nbsp Costanera Norte Freeway crossing downtown with 100 free flow Santiago Chile Congestion pricing has also been implemented in urban freeways Between 2004 and 2005 Santiago de Chile implemented the first 100 non stop urban toll for a freeway passing through a downtown area 133 charging by the distance traveled 134 Congestion pricing has been used since 2007 during rush hours in order to maintain reasonable speeds within the city core 135 136 Norway pioneered the implementation of electronic urban tolling in the main corridors of Norway s three major cities Bergen 1986 Oslo 1990 and Trondheim 1991 137 In Bergen cars can only enter the central area using a toll road so that the effect is similar to a congestion charge Though initially intended only to raise revenues to finance road infrastructure the urban toll ring at Oslo created an unintended congestion pricing effect as traffic decreased by around 5 The Trondheim Toll Scheme also has congestion pricing effects as charges vary by time of day The Norwegian authorities pursued authorization to implement congestion charges in cities and legislation was approved by Parliament in 2001 138 In October 2011 the Norwegian government announced the introduction of rules allowing congestion charging in cities The measure is intended to cut greenhouse gas and air pollutant emissions and relief traffic congestion 139 As of November 2015 update Norwegian authorities have implemented urban charging schemes that operates both on the motorways and for access into downtown areas in five additional cities or municipalities Haugesund Kristiansand Namsos Stavanger and Tonsberg 140 The Norwegian electronic toll collection system is called AutoPASS and is part of the joint venture EasyGo Single facilities edit Urban edit nbsp FasTrak HOT lanes at 91 Express Lanes at Orange County California Congestion pricing has also been applied to specific roadways 141 The first of this kind of specific schemes allowed users of low or single occupancy vehicles to use a high occupancy vehicle lanes HOV if they pay a toll This scheme is known as high occupancy toll lanes HOT lanes and it has been introduced mainly in the United States and Canada The first practical implementations was California s private toll 91 Express Lanes in Orange County in 1995 followed in 1996 by Interstate 15 in San Diego There has been controversy over this concept and HOT schemes have been called Lexus lanes as critics see this new pricing scheme as a perk to the rich 142 143 144 According to the Texas A amp M Transportation Institute by 2012 there were in the United States 722 corridor miles of HOV lanes 294 corridor miles of HOT Express lanes and 163 corridor miles of HOT Express lanes under construction 145 Congestion pricing in the form of variable tolls by time of the day have also been implemented in bridges and tunnels providing access to the central business districts of several major cities In most cases there was a toll already in existence Dynamic pricing is relatively rare compared to variable pricing One example of dynamic tolling is the Custis Memorial Parkway in the Washington D C metro area where at times of severe congestion tolls can reach almost US 50 146 However on average round trip prices are much lower 11 88 2019 5 04 2020 4 75 2021 147 nbsp Variable tolls by time of the day were implemented on the Sydney Harbour Bridge in January 2009 In March 2001 the Port Authority of New York and New Jersey PANYNJ implemented a discount on regular toll fees during off peak hours for those vehicles paying electronically with an E ZPass issued in New York State These discount toll was implemented at several tunnels and bridges connecting New York City and New Jersey including the George Washington Bridge Lincoln Tunnel and Holland Tunnel and at some other bridges administered by PANYNJ 148 149 Since March 2008 qualified low emission automobiles with a fuel economy of at least 45 miles per gallon are eligible to receive a Port Authority Green Pass which allows for a 50 discount during off peak hours as compared to the regular full toll 150 In January 2009 variable tolls were implemented at Sydney Harbour Bridge two weeks after upgrading to 100 free flow electronic toll collection The highest fees are charged during the morning and afternoon peak periods a toll 25 lower applies for the shoulder periods and a toll lower than the previously existing is charged at nights weekends and public holidays This is Australia s first road congestion pricing scheme and has had only a very minor effect on traffic levels reducing them by 0 19 151 152 153 154 In July 2010 congestion tolls were implemented at the San Francisco Oakland Bay Bridge The Bay Bridge congestion pricing scheme charges a US 6 toll from 5 a m to 10 a m and 3 p m to 7 p m Monday through Friday During weekends cars pay US 5 The toll remained at the previous toll of US 4 at all other times on weekdays 155 According to the Bay Area Toll Authority fewer users are driving during the peak hours and more vehicles are crossing the Bay Bridge before and after the 5 10 a m period in which the congestion toll goes into effect The agency also reported that commute delays in the first six months have dropped by an average of 15 percent compared with 2009 When the congestion tolls were proposed the agency expected the scheme to produce a 20 to 30 percent drop in commute traffic 156 Non urban edit Autoroute A1 in Northern France is one of the few cases of congestion pricing implemented outside of urban areas This is an expressway connecting Paris to Lille and since 1992 congestion prices have been applied during weekends with the objective of spreading demand on the trip back to Paris on Sunday afternoons and evenings 157 Research edit Measurement of effects edit In a road network congestion can be considered a specific measure of the time delay in a journey or time lost through traffic jams Delays can be caused by some combination of traffic density road capacity and the delaying effects of other road users and traffic management schemes such as traffic lights junctions and street works This can be measured as the extra journey time needed to traverse a congested route when compared to the same route with no such interference However this technical definition of congestion as a measurement of delay can get confused and used interchangeably with traffic density in the public mind 158 To measure the true effects of any traffic management scheme it is normally necessary to establish a baseline or do nothing case which estimates the effects on the network without any changes other than normal trends and expected local changes Notably this was not done for the London Congestion Charging Scheme which has led to claims that it is not possible to determine the extent of the actual influence of the scheme 159 Regardless of the scheme s impact in a retrospective analysis Transport for London TfL estimated there would have already been a significant reduction in traffic as a consequence of parking policies and increased congestion due to traffic management and other interventions that had the effect of reducing highway capacity In 2006 the last year before the zone was expanded TfL observed that traffic flows were lower than in any recent year while network traffic speeds were also lower than in any recent year 160 In 2013 ten years since its implementation TfL reported that the congestion charging scheme resulted in a 10 reduction in traffic volumes from baseline conditions and an overall reduction of 11 in vehicle kilometres in London between 2000 and 2012 Despite these gains traffic speeds have also been getting progressively slower over the past decade particularly in central London TfL explains that the historic decline in traffic speeds is most likely due to interventions that have reduced the effective capacity of the road network in order to improve the urban environment increase road safety and prioritise public transport pedestrian and cycle traffic as well as an increase in road works by utilities and general development activity since 2006 TfL concludes that while levels of congestion in central London are close to pre charging levels the effectiveness of the congestion charge in reducing traffic volumes means that conditions would be worse without the Congestion Charging scheme 161 Academic debate and concerns edit Even the transport economists who advocate congestion pricing have anticipated several practical limitations concerns and controversial issues regarding the actual implementation of this policy As summarized by Cervero 162 True social cost pricing of metropolitan travel has proven to be a theoretical ideal that so far has eluded real world implementation The primary obstacle is that except for professors of transportation economics and a cadre of vocal environmentalists few people are in favor of considerably higher charges for peak period travel Middle class motorists often complain they already pay too much in gasoline taxes and registration fees to drive their cars and that to pay more during congested periods would add insult to injury In the United States few politicians are willing to champion the cause of congestion pricing for fear of reprisal from their constituents Critics also argue that charging more to drive is elitist policy pricing the poor off of roads so that the wealthy can move about unencumbered It is for all these reasons that peak period pricing remains a pipe dream in the minds of many Both Button 163 and Small et al 12 have identified the following issues The real world demand functions for urban road travel are more complex than the theoretical functions used in transport economics analysis Congestion pricing was developed as a first best solution based on the assumption that the optimal price of road space equals the marginal cost price if all other goods in the economy are also marginal cost priced In the real world this is not true thus actual implementation of congestion pricing is just a proxy or second best solution Based on the economic principles behind congestion pricing the optimal congestion charge should make up for the difference between the average cost paid by the driver and the marginal cost imposed on other drivers such as extra delay and on society as a whole such as air pollution The practical challenge of setting optimal link based tolls is daunting given that neither the demand functions nor the link specific speed flow curves can be known precisely Therefore transport economists recognize that in practice setting the right price for the congestion charge becomes a trial and error experience Inequality issue A main concern is the possibility of undesirable distribution repercussions because of the diversity of road users The use of the tolled road depends on the user s level of income Where some cannot afford to pay the congestion charge then this policy is likely to privilege the middle class and rich The users who shift to some less preferred alternative are also worse off The less wealthy are the more likely to switch to public transit Road space rationing is another strategy generally viewed as more equitable than congestion pricing However high income users can always avoid the travel restrictions by owning a second car and users with relatively inelastic demand such as a worker who needs to transport tools to a job site are relatively more impacted 164 There are difficulties in deciding how to allocate the revenues raised This is a controversial issue among scholars The revenues can be used to improve public transport as is the case in London or to invest in new road infrastructure as in Oslo Some academics make the case that revenues should be disposed as a direct transfer payments to former road users Congestion pricing is not intended to increase public revenues or to become just another tax however this is precisely one of the main concerns of road users and taxpayers One alternative aimed at avoiding inequality and revenue allocation issues is to implement a rationing of peak period travel through mobility rights or revenue neutral credit based congestion pricing 165 This system would be similar to the existing emissions trading of carbon credit Metropolitan area or city residents or the taxpayers would be issued mobility rights or congestion credits and would have the option of using these for themselves or trading or selling them to anyone willing to continue traveling by automobile beyond their personal quota This trading system would allow direct benefits to be accrued by those users shifting to public transportation or by those reducing their peak hour travel rather than the government 166 167 Public controversy edit Experience from the few cities where congestion pricing has been implemented shows that social and political acceptability is key Public discontent with congestion pricing or rejection of congestion pricing proposals is due mainly to the inequality issues the economic burden on neighboring communities the effect on retail businesses and the economic activity in general and the fears that the revenues will become just another tax Congestion pricing remains highly controversial with the public both before and after implementation This has in part been resolved through referendums such as after the seven month trial period in Stockholm 168 however this creates a debate as to where the border line for the referendum should go since it is often the people living outside the urban area who have to pay the tax while the external benefit is granted to those who live within the area In Stockholm there was a majority in the referendum within the city border where the votes counted but not outside 169 170 Some concerns have also been expressed regarding the effects of cordon area congestion pricing on economic activity and land use 171 as the benefits are usually evaluated from the urban transportation perspective only However congestion pricing schemes have been used with the main objective of improving urban quality and to preserve historical heritage in the small cities 72 172 The effects of a charge on business have been disputed reports have shops and businesses being heavily impacted by the cost of the charge both in terms of lost sales and increased delivery costs in London 173 while others show that businesses were then supporting the charge six months after implementation 174 Reports show business activity within the charge zone had been higher in both productivity and profitability and that the charge had a broadly neutral impact on the London wide economy 175 while others claim an average drop in business of 25 following the 2007 extension 176 Other criticism has been raised concerning the environmental effects on neighborhoods bordering the congestion zone with critics claiming that congestion pricing would create parking lots and add more traffic and pollution to those neighborhoods 177 and the imposition of a regressive tax on some commuters 178 179 Stockholm s trial of congestion pricing however showed a reduction in traffic in areas outside the congestion zone 180 Other opponents argue that the pricing could become a tax on middle and lower class residents since those citizens would be affected the most financially 181 The installation of cameras for tracking purposes may also raise civil liberties concerns 182 183 Effects edit A 2019 study of congestion pricing in Stockholm between 2006 and 2010 found that in the absence of congestion pricing that Stockholm s air would have been five to 15 percent more polluted between 2006 and 2010 and that young children would have suffered substantially more asthma attacks 184 3 A 2020 study that analyzed driving restrictions in Beijing estimated that the implementation of congestion pricing would reduce total traffic increase traffic speed reduce pollution reduce greenhouse gas emissions reduce traffic accidents and increase tax revenues 185 A 2020 study of London found that congestion pricing introduced in 2003 led to reductions in pollution and reductions in driving but it increased pollution 186 from diesel vehicles which were exempt from the congestion pricing 187 A 2021 study found that congestion pricing reduced CO2 emissions through downsizing commuting distances and housing sizes 2 A 2013 study found that after congestion pricing was implemented in Seattle drivers reported greater satisfaction with the routes covered by congestion pricing and reported lower stress 188 189 A 2016 study found that more people used public transportation due to increases in congestion pricing in Singapore 190 A 2016 study found that real estate prices dropped by 19 within the cordoned off areas of Singapore where congestion pricing was in place relative to the areas outside of the area 191 Waterways editPanama Canal booking system and auction edit nbsp Several dozen vessels queuing at the Pacific Ocean waiting to enter the Panama Canal nbsp Vessels waiting at the Gatun Lake to cross the Gatun Locks to exit the canal at the Atlantic side The Panama Canal had a limited capacity determined by operational times and cycles of the existing locks and further constrained by the current trend towards larger close to Panamax sized vessels transiting the canal which take more transit time within the locks and navigational channels and the need for permanent periodical maintenance works due to the aging canal which forces periodical shutdowns of this waterway On the other hand demand has been growing due to the rapid growth of international trade Also many users require a guarantee of certain level of service Despite the gains which have been made in efficiency the Panama Canal Authority ACP estimates that the canal will reach its maximum sustainable capacity between 2009 and 2012 192 The long term solution for the congestion problems was the expansion of the canal through a new third set of locks Work started in 2007 and the expanded canal enter commercial operation in June 2016 The new locks allow transit of larger Post Panamax ships which have a greater cargo capacity than the current locks are capable of handling 193 Considering the high operational costs of the vessels container ships have daily operational costs of approximately US 40 000 the long queues that occur during the high season sometimes up to a week s delay and the high value of some of the cargo transported through the canal the ACP implemented a congestion pricing scheme to allow a better management of the scarce capacity available and to increase the level of service offered to the shipping companies The scheme gave users two choices 1 transit by order of arrival on a first come first served basis as the canal historically has operated or 2 booked service for a fee a congestion charge The booked service allowed two options of fees The Transit Booking System available online allowing customers who do not want to wait in queue to pay an additional 15 over the regular tolls guaranteeing a specific day for transit and crossing the canal in 18 hours or less ACP sells 24 of these daily slots up to 365 days in advance The second choice was high priority transit Since 2006 ACP has available a 25th slot sold through the Transit Slot Auction to the highest bidder 194 The main customers of the Transit Booking System are cruise ships container ships vehicle carriers and non containerized cargo vessels 195 The highest toll for high priority passage paid through the Transit Slot Auction was US 220 300 charged on a tanker in August 2006 196 bypassing a 90 ship queue awaiting the end of maintenance works on the Gatun locks thus avoiding a seven day delay The normal fee would have been just US 13 430 197 The average regular toll is around US 54 000 Airports edit nbsp New York s John F Kennedy International Airport one of the world s busiest Many airports are facing extreme congestion runway capacity being the scarcest resource Congestion pricing schemes have been proposed to mitigate this problem including slot auctions such as with the Panama Canal but implementation has been piecemeal 198 199 200 The first scheme was started in 1968 when higher landing fees for peak hour use by aircraft with 25 seats or less at Newark Kennedy and LaGuardia airports in New York City As a result of the higher charges general aviation activity during peak periods decreased by 30 These fees were applied until deregulation of the industry but higher fees for general aviation were kept to discourage this type of operations at New York s busiest airports In 1988 a higher landing fee for smaller aircraft at Boston s Logan Airport was adopted with this measure much of the general aviation abandoned Logan for secondary airports 201 In both US cases the pricing scheme was challenged in court In the case of Boston the judge ruled in favor of general aviation users due to lack of alternative airports In the case of New York the judge dismissed the case because the fee was a justified means of relieving congestion 202 Congestion pricing has also been implemented for scheduled airline services The British Airports Authority BAA has been a pioneer in implementing congestion pricing for all types of commercial aviation In 1972 implemented the first peak pricing policy with surcharges varying depending on the season and time of the day and by 1976 raised these peak charges London Heathrow had seven pricing structures between 1976 and 1984 In this case it was the US carriers that went to international arbitration in 1988 and won their case 202 In 1991 the Athens Airport charged a 25 higher landing fee for those aircraft arriving between 11 00 and 17 00 during the high tourism season during summer Hong Kong charges an additional flat fee to the basic weight charge 203 In 1991 92 peak pricing at London s main airports Heathrow Gatwick and Stansted was implemented airlines were charged different landing fees for peak and off peak operations depending on the weight of aircraft 204 For example in the case of a Boeing 757 the peak landing fee was about 2 5 times higher than the off peak fee in all three airports For a Boeing 747 the differential was even higher as the old 747 carries a higher noise charge 205 Though related to runway congestion the main objective of these peak charges at the major British airports was to raise revenue for investment See also editAutomobile costs Braess s paradox Deadweight loss Downs Thomson paradox Electricity pricing Low emission zone Energy demand management congestion pricing applied to electric utilities GNSS road pricing Induced demand Jevons paradox Lewis Mogridge position Pareto efficiency Road pricing Road space rationing Tax incidence Tragedy of the commons Transport economics Transportation demand management Variable pricing Vehicle miles traveled tax Water pricingReferences edit What is Congestion Pricing Congestion Pricing FHWA Office of Operations ops fhwa dot gov Retrieved 2021 12 18 a b Domon Shohei Hirota Mayu Kono Tatsuhito Managi Shunsuke Matsuki Yusuke 2021 The long run effects of congestion tolls carbon tax and land use regulations on urban CO2 emissions Regional Science and Urban Economics 92 103750 doi 10 1016 j regsciurbeco 2021 103750 ISSN 0166 0462 S2CID 244473881 a b Simeonova Emilia Currie Janet Nilsson Peter Walker Reed 2019 10 14 Congestion Pricing Air Pollution and Children s Health Journal of Human Resources 56 4 0218 9363R2 doi 10 3368 jhr 56 4 0218 9363R2 ISSN 0022 166X S2CID 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2008 04 10 Retrieved 2008 04 16 The history of Limited Access Zones in Rome PRoGR SS Project Archived from the original on 2008 03 09 Retrieved 2013 04 13 Swedish Road Administration 2007 08 21 Congestion tax in Stockholm Archived from the original on 2007 03 02 Retrieved 2008 07 15 Ken Belson 2008 01 27 Toll Discounts for Going Green The New York Times Retrieved 2008 01 27 BBC News 2008 03 02 Milan introduces traffic charge Retrieved 2008 01 17 Richard Owen 2008 01 03 Congestion fee leaves Milan in a jam Times Online London Retrieved 2008 04 16 Edoardo Croci 2008 12 31 Ecopass Prorogato fino al 31 dicembre 2009 Nei primi mesi dell anno prevista la consultazione dei cittadini in Italian Comune di Milano Retrieved 2009 02 14 The complete pricing scheme is presented in this article Official Ecopass page in Italian Comune Milano Retrieved 2011 11 02 a b Area C e partita calate del 40 le auto in centro dopo l entrata in vigore del pedaggio Area C takes off auto traffic decreased 40 in the center after the toll goes into force Corriere della Sera Milano in Italian 2012 01 16 Retrieved 2012 01 16 Swedish Transport Agency Congestion Tax Gothenburg PDF Transport Styrelsen Archived from the original PDF on 2013 12 13 Retrieved 2013 12 10 Transport for London Congestion charging home page Archived from the original on 2008 04 03 Retrieved 2008 04 06 Swedish Road Administration Congestion tax in Stockholm home page in Swedish Archived from the original on 2007 03 02 Retrieved 2008 07 15 Land Transport Authority Electronic Road Pricing LTA home page Archived from the original on 2008 04 04 Retrieved 2008 04 06 Ken Belson 2008 03 16 Importing a Decongestant for Midtown Streets The New York Times Retrieved 2008 04 06 Predicting Where The Traffic Will Flow PLANETIZEN Retrieved 2008 04 06 IBM and Singapore s Land Transport Authority Pilot Innovative Traffic Prediction Tool IBM Press release 2007 08 01 Retrieved 2008 07 15 Channel NewsAsia 2010 06 10 Satellite navigation ERP and 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Emission Discount for Congestion Charge scheme countering dieselization Green Car Congress 2013 04 24 Retrieved 2013 04 24 London tightens up congestion charge in attempt to drive out diesel The Guardian 2013 04 24 Retrieved 2013 04 24 New green discount for the congestion charge comes in BBC News 2013 07 01 Retrieved 2013 07 02 Lilly Chris 2016 06 24 Congestion charge sunset period ends today Next Green Car Retrieved 2016 06 29 Faye Sunderland 2014 01 07 London Congestion Charge to rise by 15 The Green Car Website UK Archived from the original on 2014 01 12 Retrieved 2014 01 12 Ross Lydall 2013 02 15 Congestion Charge has cost drivers 2 6bn in decade but failed to cut traffic jams London Evening Standard Retrieved 2015 02 15 Press Association 2014 05 28 London congestion charge to rise The Guardian Retrieved 2015 02 15 Gwyn Topham 2014 01 06 London congestion charge expected to rise by at least 15 The Guardian Retrieved 2015 02 15 Mason Rowena 2017 02 17 London to introduce 10 vehicle pollution charge says Sadiq Khan The Guardian Retrieved 2017 02 24 Saarinen Martin 2017 02 17 London introduces new 10 T charge to cut vehicle pollution Auto Express Retrieved 2017 02 24 Kimiko de Reytas Tamura 2017 02 17 A Push for Diesel Leaves London Gasping Amid Record Pollution The New York Times Retrieved 2017 02 24 London s new pollution charge begins 2019 04 08 Retrieved 2019 04 08 Pisapia lancia l operazione Area C l obiettivo 20 per cento di traffico Corriere della Sera Milano in Italian 2011 12 18 Retrieved 2012 01 02 a b Rosario Mastrosimone 2011 12 27 Congestion charge Milano Area C tariffe divieti esenti in Italian Sostenibile Archived from the original on 2012 01 10 Retrieved 2012 01 02 Comune di Milano 2013 03 17 Area C Istituita la congestion charge definitiva Area C The congestion charge was made permanent in Italian Comune di Milano Retrieved 2013 10 19 a b c d Trafikverket Swedish Transport Administration and Transportstyrelsen Swedish Transport Agency 2015 On 1 January 2016 congestion taxes in Stockholm will be raised and congestion tax will be levied on Essingeleden PDF Transportstyrelsen Retrieved 2016 06 29 a b Hojd och ny trangselavgift ger effekt Increase and new congestion charge gives effect Svenska Dagbladet in Swedish 2016 01 12 Retrieved 2016 06 24 Local welcome for congestion charge BBC 2002 10 01 Retrieved 2007 04 27 a b European Local Transport Information Service ELTIS 2007 Inner city access restriction for substainable mobility for inhabitants and tourists Znojmo Czech Republic Archived from the original on 2009 09 07 Retrieved 2008 03 01 Helen Pickles 2003 04 22 Riga Weekend to remember Telegraph co uk Retrieved 2013 04 13 Controlled Vehicular Access Archived 2012 03 06 at the Wayback Machine CVA Technology 1 May 2007 a b Valletta traffic congestion considerably reduced MaltaMedia News 2007 05 06 Retrieved 2008 07 15 Country s First Congestion Charge is a Year Old Tomorrow Durham County Council 2003 09 30 Archived from the original on October 7 2007 Retrieved 2008 07 15 European Local Transport Information Service ELTIS Controlled Vehicle Access Valleta Malta Archived from the original on 2009 09 07 Retrieved 2008 04 05 Electronic road pricing Developments in Hong Kong 1983 1986 Edinburgh to decide on road tolls BBC News British Broadcasting Corporation 2005 02 07 Retrieved 2008 07 15 Edinburgh rejects congestion plan BBC News British Broadcasting Corporation 2005 02 22 Retrieved 2008 07 15 Cramb Auslan 2005 02 08 Edinburgh votes on 2 road toll The Daily Telegraph Archived from the original on 2007 03 08 Retrieved 2007 12 02 Road pricing proposals rejected BBC News 2008 03 05 Retrieved 2008 04 08 Danny Hakim Nicholas Confessore 2007 07 17 Albany Rebuffs City Traffic Plan The New York Times Retrieved 2008 07 15 A Greener Greater New York PLANYC 2030 Transportation Report Archived 2007 07 03 at the Wayback Machine Transportation Alternatives Congestion Pricing Archived from the original on 2008 03 05 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to 3 billion of investment GMPTE Greater Manchester Public Transport Entity 2008 09 06 Archived from the original on 2008 11 16 Retrieved 2008 07 07 Voters reject congestion charge BBC 2008 12 12 Retrieved 2008 12 12 Urban Partnerships U S Department of Transportation Archived from the original on June 28 2008 Retrieved 2008 06 20 San Francisco Urban Partnership Agreement U S Department of Transportation Archived from the original on 2008 08 07 Retrieved 2008 06 20 Seattle Lake Washington Urban Partnership Agreement U S Department of Transportation Archived from the original on August 7 2008 Retrieved 2008 06 20 Miami Urban Partnership Agreement U S Department of Transportation Archived from the original on May 3 2008 Retrieved 2008 06 20 Minneapolis Urban Partnership Agreement U S Department of Transportation Archived from the original on August 7 2008 Retrieved 2008 06 20 Jennifer Lee 2008 04 29 Chicago Gets New York s Congestion Money The New York Times Retrieved 2008 06 20 Mobility Access and Pricing Study San Francisco County Transportation Authority Archived from the original on 2009 06 14 Retrieved 2010 06 21 Mobility Access and Pricing Study MAPS Fact Sheet PDF San Francisco County Transportation Authority Retrieved 2010 06 21 Available for download Rachael Gordon 2007 09 19 S F studying congestion pricing to ease traffic promote transit San Francisco Chronicle Retrieved 2008 07 15 Malia Wollan 2009 01 04 San Francisco Studies Fees to Ease Traffic The New York Times Retrieved 2009 02 22 Rachel Gordon 2010 11 11 S F may hit drivers with variety of tolls San Francisco Chronicle Retrieved 2010 12 05 Heather Ishimaru 2010 11 10 SF considers downtown congestion pricing ABC7 News San Francisco Archived from the original on 2011 06 29 Retrieved 2010 12 05 Santora Marc August 13 2017 Cuomo Calls Manhattan Traffic Plan an Idea Whose Time Has Come The New York Times ISSN 0362 4331 Goodman J David August 21 2017 Mayor de Blasio Says He Does Not Believe in Congestion 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law authorizes the creation of congestion pricing by local governments O Estado de S Paulo in Portuguese Retrieved 2013 06 26 Agencia Estado 2012 01 04 Dilma aprova lei que preve pedagio urbano Dilma approves law that allows congestion pricing R7 Noticias in Portuguese Archived from the original on 2013 05 11 Retrieved 2013 06 26 Presidencia da Republica 2012 01 03 Lei Nº 12 587 de 3 de Janeiro de 2012 Law N 12 587 of January 3rd 2012 in Portuguese Presidencia da Republica Casa Civil Retrieved 2013 06 26 See article 23 Roney Domingos 2012 04 25 Projeto que cria pedagio urbano passa em comissao na Camara de SP Bill to create congestion pricing passed in commission of the Sao Paulo city council O Globo in Portuguese Retrieved 2013 06 27 Pedagio urbano de Sao Paulo pode custar ate R 88 por mes Sao Paulo s congestion pricing could cost up to R 88 per month Terra in Portuguese 2012 04 26 Retrieved 2013 06 27 Claudia Jordao e Maria Paola de Salvo 2012 06 20 Perdendo 30 bilhoes de reais por ano por congestionamentos de transito SP mira o exemplo do pedagio urbano de Londres Lossing 30 billion reais per year due to traffic congestion Sao Paulo looks at the example of London congestion charges Veja Sao Paulo in Portuguese Archived from the original on 2013 12 19 Retrieved 2013 06 27 Amanda Previdelli 2012 06 11 Paulistano nao quer pedagio urbano segundo Datafolha Sao Paulo residents do not want congestion pricing according to Datafolha Exame in Portuguese Retrieved 2013 06 27 Pedagio urbano e incineracao de lixo estao entre as propostas da SP 2040 Congestion pricing and waste incineration are among the proposals of SP 2040 Folha de S Paulo in Portuguese 2012 11 13 Retrieved 2013 06 27 UK Commission on Integrated Transport Road Charging Scheme South America Chile Santiago de Chile Archived from the original on April 21 2008 Retrieved 2008 07 04 Costanera Norte Freeway Costanera Norte Freeway in Spanish Costanera Norte Tarifas 2010 PDF in Spanish Sociedad Concesionaria 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Verhoef Erik T 2007 The Economics of Urban Transportation Routledge New York ISBN 978 0 415 28515 5 See Chapter 4 Pricing and 4 3 Congestion Pricing in Practice Smeed R J 1964 Road pricing the economic and technical possibilities HMSO Tsekeris Theodore Voss Stefan 2009 Design and evaluation of road pricing State of the art and methodological advances Netnomics 10 5 52 doi 10 1007 s11066 008 9024 z S2CID 153724717 Verhoef Erik T Bliemer Michiel Steg Linda Van Wee Bert 2008 Pricing in Road Transport A Multi Disciplinary Perspective Edward Elgar Publishing Cheltenham UK ISBN 978 1 84542 860 0 Walters A A 1968 The Economics of Road User Charges World Bank Staff Occasional Papers Number Five Washington D C ISBN 978 0 8018 0653 7 External links edit nbsp Transportation Economics Pricing at Wikibooks Portals nbsp Economics nbsp Environment nbsp Transport Retrieved from https en wikipedia org w index php title Congestion pricing amp oldid 1218874838, wikipedia, wiki, book, books, library,

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