Congestion pricing
Typical traffic congestion in an urban free-
way. Shown here I-80 Eastshore Freeway,
Berkeley, United States.
London Heathrow Airport, one of the world’s
most congested airports.
Congestion pricing or congestion charges
is a system of surcharging users of a trans-
port network in periods of peak demand to
reduce traffic congestion. Examples include
some toll-like road pricing fees, and higher
peak charges for utilities, public transport
and slots in canals and airports. This variable
pricing strategy regulates demand, making it
possible to manage congestion without in-
creasing supply. Market economics theory,
which encompasses the congestion pricing
concept, postulates that users will be forced
to pay for the negative externalities they cre-
ate, making them conscious of the costs they
impose upon each other when consuming
during the peak demand, and more aware of
their impact on the environment.
The application on urban roads is limited
to a small number of cities, including London,
Stockholm, Singapore, and Milan, as well as
a few smaller towns. Four general types of
systems are in use; a cordon area around a
city center, with charges for passing the cor-
don line; area wide congestion pricing, which
charges for being inside an area; a city cen-
ter toll ring, with toll collection surrounding
the city; and corridor or single facility con-
gestion pricing, where access to a lane or a
facility is priced.
Implementation of congestion pricing has
reduced congestion in urban areas, but has
also sparked criticism and public discontent.
Critics maintain that congestion pricing is
not equitable, places an economic burden on
neighboring communities, has a negative ef-
fect on retail businesses and on economic
activity in general, and is just another tax.
A survey of economic literature on the
subject, however, finds that most economists
agree that some form of road pricing to re-
duce congestion is economically viable, al-
though there is disagreement on what form
road pricing should take. They prima