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Road Congestion Pricing in Europe

Road Congestion Pricing in Europe

Implications for the United States

Edited by Harry W. Richardson and Chang-Hee Christine Bae

In February 2003, the London Congestion Charging Scheme was introduced and in 2006 a similar policy was introduced in Stockholm. In both cases automobile traffic entering the cordon declined by about 20 percent. This book evaluates these and other similar programs exploring their implications for the United States. This study’s value lies in the fact that it examines road pricing in the real world and not simply from a theoretical viewpoint. As a comparative study it will appeal to both policymakers and academics in transportation economics and planning, urban economics, planning and economic geography.

Chapter 1: Introduction

Harry W. Richardson and Chang-Hee Christine Bae

Subjects: economics and finance, transport, environment, transport, urban and regional studies, transport


Harry W. Richardson and Chang-Hee Christine Bae This introduction has two purposes: to present the book’s central theme, that is, the implications of London’s Congestion Charging Scheme and the Stockholm Trial for the United States, and to summarize the key points of the contributing chapters. The idea of pricing for the use of roads has been around for a long time, stretching back at least to the turnpike roads of the eighteenth century (much more common in the United Kingdom and other parts of Western Europe than in the United States), and more recently, the privilege under the Interstate Highway System for each State to designate one highway as a toll road (implemented more in Northeastern States, such as New York and New Jersey) and the plethora of toll bridges throughout the country. But all these examples were either to raise revenue or to recover construction costs not to decongest roads. The idea of pricing as an instrument to tackle road congestion is based on literature in economic theory from the early 1960s in which economists such as Walters (1961), Vickrey (1963) and Johnson (1964) developed the standard road congestion analysis to demonstrate that the market equilibrium derived from unpriced roads results in excessive congestion. The key idea was obvious: drivers pay only for their own congestions not those of others. Setting the price of driving equal to the social marginal cost, however, would reduce traffic to its optimal level. There may still be some level of congestion, but...