What Happened
Six years ago, Stockholm, Sweden, implemented a congestion pricing scheme to cut traffic in its downtown district. The project, which was combined with expanded biking and public transportation, has been a success—it has resulted in a 20 percent reduction in traffic, and has generated positive ratings from both businesses and residents.
So What?
So far, congestion pricing has not succeeded where proposed in U.S. cities like New York. However, the successes in Stockholm and other European cities provide interesting lessons that should be reviewed by municipal leaders.
Stockholm
Congestion pricing was initiated in 2003, when a green political party was able to build a government coalition in favor of comprehensive plan to reduce traffic. Leveraging Singapore’s Area Licensing Scheme introduced in 1975, and London’s in 2003, Stockholm got to work on developing an implementation plan.
A trial period was introduced in 2006, which increased public transportation options to coincide with a pricing scheme. The seven-month trial was followed by a vote on whether the system should be come permanent. Fifty-two percent of voters were in favor, and the system was put into effect permanently; local reports say the scheme is working.
Rates between 10 SEK (about $1.48) and 20 SEK are charged based on whether the time is peak or off-peak. In general, traffic has decreased by about 20 percent in the downtown area.
London
London’s scheme has been in place since 2003. A driver into downtown London on weekdays between 7 a.m. and 6:30 p.m. can expect to pay £8 pounds (about $12.46). Payment machines are located in areas prior to entering the zone, and passes can be purchased online. As is the case in Stockholm, video cameras record license plates; an £80 pound fine is given to vehicles without passes.
London’s system is also considered effective, as traffic has been reduced by about 20 percent and net revenues are approximately £100 million pounds. 110,000 motorists each day pay the fee, with the fastest growing payment method being mobile phone text message.
The Victoria Transport Policy Institute recently published a report that details the London Congestion Pricing project and its implications for other cities.
Research & Conclusions
The Federal Highway Administration release a primer as a tool for those interested in learning the basics on congestion pricing. It discusses the efforts in Singapore, London and Stockholm. Also, a free report from the Rand Corporation on Equity and Congestion Pricing is available.
A comprehensive report on Stockholm’s success from the University of California actually calculates savings from the elimination of congestion; according to the report, saving one hour of travel time is valued between $8 and $10. From a political standpoint, the evidence also shows that people who benefit from congestion pricing (tolling) are more likely to vote in support.
As noted above, New York’s proposed pricing plan was never enacted.