How Congestion Pricing Can Raise Awareness and Save the World

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Not surprisingly, a recent report has identified congestion pricing as the best approach to dealing with New York City's mounting traffic congestion issues.

Congestion pricing is a way for large cities to cut down on traffic congestion by charging tolls or fees. Drivers in these areas are obligated to pay to drive in certain areas or at certain times with the most congestion. This mechanism is meant to encourage people to carpool, take public transportation, or to avoid such trips. Not only does congestion pricing increase quality of life in city centers due to less congestion, but they lead to the longterm benefits of lessening smog and carbon emissions.

The institution of these fees has generally begun in the 2000s, and 2010s, while Norway implemented congestion pricing extensively in the 1990s. Its oldest program dates back to 1986 in the city of Bergen.

Economics of Congestion Pricing

Looked at as an economic concept, congestion pricing focuses on the demand side of the law of supply and demand. Roads are in high demand in the morning and early evening when people are going to and leaving work. The idea is that, in addition to encouraging use of subways or light rail trains for commuters, congestion pricing keeps non-commuters outside of congested areas at rush hour, requiring them to pay for, say, going to dinner at a restaurant or staying in the city center after work for shopping, etc.

Types of Congestion Pricing Plans

Cordon Congestion Pricing

This pricing plan is oriented around the most congested parts of a city. It usually involves setting up payment booths (or making other arrangements for payment) and charging drivers a flat or time-based fee to enter the busiest parts of the metropolitan area.

For example, in 2003, London set up a cordon plan, charging motorists £5 to drive in designated areas between 7:00 a.m. and 6:30 p.m. on weekdays.

Distance-based Congestion Pricing

This type of congestion pricing can be considered a rural model, since it usually applies to stretches of highways. U.S. residents are very familiar with toll highways, sometimes called turnpikes, which work on this model. When exiting the highway, motorists pay a fee that corresponds to how much distance they've traveled––if one needs to or chooses to be on the toll highway longer, she/he will pay more.

This is meant to help with congested highways by encouraging people to fan out into smaller, shorter highways that take a scenic route and don't have tolls.

Time-based Congestion Pricing

Often, municipalities try to keep charges down so residents won't get too angry. They may turn to systems that impose tolls only at peak times, such as a couple of hours in the morning and a couple at the end of the work day.

One example of this is in San Francisco––as of 2010, tolls on the San Francisco-Bay Bridge are in effect from 5-10 a.m. and 3-7 p.m., weekdays only.

Variable Pricing

Valuable Pricing for congestion might be thought of as a simple example of how a "smart city" might work. It is a matter of collective comprehensive data and using it to make real-time alterations of prices to charge drivers based on situations.

This developing, cutting-edge methodology would use GPS and other technologies for local government employees to track congestion in real time, that caused by too much demand (rush hour traffic) or too little supply (lane closures due to construction, etc.). 

Drivers would be notified of the prices to drive various routes via apps or similar in-vehicle technology. This way, when certain areas are congested at that particular moment––not generally––drivers will be encouraged to choose other routes to––ideally––reduce congestion and make driving in construction areas or bumper-to-bumper traffic situations safer.

Congestion Pricing to Fund Projects

These are the most common types of congestion pricing, keeping in mind that they are often used in some combination, with components of more than one model working together. Another point worth considering is that congestion pricing doesn't have to apply to road travel, or even to physical congestion. It can also apply to other situations in which there's excessive demand for resources such as electricity or phone service.

However, we will focus on traffic when looking at the revenue it can bring. The payments from motorists do add up to profits. Most cities have policies that require the funds brought in be used to recoup those expenditures.

While congestion pricing has a primary goal of reducing congestion, another attractive outcome of the policies are such that they bring in surpluses. Sometimes these extra funds can go to transportation-related projects. As one handy example, a San Diego congestion pricing program that included fast lanes used the fees for those lanes to fund a line of bus service called Inland Breeze––$500,000 in funding, to be exact.

Environmental Awareness

According to a report from the Lincoln Institute on congestion pricing advises, "Public opinion is perhaps the most critical determinant of the prospect for successful congestion pricing implementation." It further states that in addition to finding out how community members may feel about such programs, parties that want to implement them should also engage in outreach, which can include educating people about the environmental benefits.

These benefits chiefly include less smog and other adverse effects of car and truck exhaust. These can have longterm benefits in the fight against global warming. What this means is that when a local government begins doing outreach prior to a congestion pricing campaign, it has the audience's ear. 

People who may not follow environmental news do take notice when their pocketbooks are directly involved. Congestion pricing definitely raises awareness, and through reducing greenhouse gases, it can play an important role in saving the world.