Congestion Pricing: What is It?

Abstract

This article explains the costs and benefits of congestion pricing, which is a concept that charges motorists for using certain stretches of highway or bridges, or entering a particular area of a city. The strategy is designed to encourage motorists to not travel during peak traffic periods, to avoid congested roadways, or to use public transit. Numerous benefits are available, such as a reduction of total peak-period congestion, to providing a variety of transportation choices, to reducing accidents as well as pollution. Three types of pricing systems are described: variable tolls, lane charging tolls, or cordon tolls. The article includes a brief description of congestion pricing programs in London, Stockholm, and Singapore.