Congestion 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 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. This variable pricing strategy regulates demand, making it possible to manage congestion without increasing supply. Market economics theory, which encompasses the congestion pricing concept, postulates that users will be forced to pay for the negative externalities they create, 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 currently 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 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.

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 effect on retail businesses and on economic activity in general, and is another tax.

A survey of economic literature on the subject, however, finds that most economists agree that some form of road pricing to reduce congestion is economically viable, although there is disagreement on what form road pricing should take. 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. Also, concerns regarding fossil fuel supply and urban transport high emissions of greenhouse gases in the context of climate change have renewed interest in congestion pricing, as it is considered one of the demand-side mechanisms that may reduce oil consumption.

Read more about Congestion Pricing:  Description, Urban Roads, Airports

Other articles related to "congestion pricing, pricing, congestion":

San Francisco Congestion Pricing - Background - Mobility, Access and Pricing Study
... San Francisco authorities began a feasibility study to evaluate how congestion pricing fits to resolve the city's problems ... the Federal Highway Administration's Value Pricing Program, with matching funds from local sources ... The study is called the Mobility, Access and Pricing Study (MAPS) ...
Congestion Pricing - Airports
... 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 ... In both US cases the pricing scheme was challenged in court ...
San Francisco Congestion Pricing
... San Francisco congestion pricing is a proposed traffic congestion user fee for vehicles traveling into the most congested areas of the city of San Francisco at certain periods of peak demand ... The proposed congestion pricing charge is part of a mobility and pricing study being carried out by the San Francisco County Transportation Authority (SFCTA) to reduce congestion at and near central ... If approved, it would be the first city based congestion charge scheme in the United States, as the New York congestion pricing scheme stalled in 2008 ...
San Francisco Congestion Pricing - Background - Doyle Drive Congestion Pricing
... San Francisco's first evaluation of a congestion pricing project was the proposal to implement such scheme at the Doyle Drive, a major approach to the Golden Gate Bridge ... Department of Transportation selected five metropolitan areas to initiate congestion pricing demonstration projects under the Urban Partnerships Congestion Initiative, for US$1 ... city later withdrew its proposal to implement congestion pricing at the Doyle Drive as part of the Urban Partnerships Congestion Initiative, and ...
Pla NYC - Congestion Pricing
... One of the most controversial aspects of the plan is the mayor’s call for congestion pricing, specifically a bid to levy a fee of $8.00 on all cars entering midtown ...

Famous quotes containing the word congestion:

    In Western Europe people perish from the congestion and stifling closeness, but with us it is from the spaciousness.... The expanses are so great that the little man hasn’t the resources to orient himself.... This is what I think about Russian suicides.
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