What Local Policy Makers Should Know about Urban Road Charging: Lessons from Worldwide Experience

• Date: 01 September 2009
• Published date: 01 September 2009
• Author: Germè Bel,Daniel Albalate
• DOI: http://doi.org/10.1111/j.1540-6210.2009.02045.x

Daniel Albalate

Germà Bel

University of Barcelona

What Local Policy Makers Should Know about Urban Road

Charging: Lessons from Worldwide Experience

Looking at

Administrative

Innovation and

Change Abroad

Daniel Albalate is a lecturer in

economics at the University of Barcelona.

His research interests include public sector

reform, privatization and regulation, infra-

structure, and urban transportation. He has

published articles in international journals

such as the

Journal of Policy Analysis and

Management, Transportation Research-A,

and

Governance.

E-mail: albalate@ub.edu

Germà Bel is a professor of economics

at the University of Barcelona and a guest

professor at the Barcelona Graduate

School of Economics. His research interests

include public sector reform, privatization

and regulation, infrastructure, and urban

development. He has published articles in

international journals such as the

Journal

of Economic Perspectives, Public Choice,

Journal of Institutional and Theoretical

Economics, Local Government Studies,

Urban Studies, Journal of Urban Affairs,

International Journal of Transport Econom-

ics, Journal of Economic Policy Reform,

Transport Reviews, Public Administration;

and

Governance.

E-mail: gbel@ub.edu

… American policy makers are

increasingly considering the

use of charges and fees on road

users to reduce traf‌f‌i c in heavily

congested urban areas.

Congestion costs are emerging as one of the most

important challenges faced by metropolitan planners

and transport authorities in developed economies.

In the United States, these costs were as high as $78

billion in 2005 and are growing as a result of rapid

increases in travel delays. In order to solve the current

and severe levels of congestion, the U.S. Department of

Transportation has recently started a program to initiate

congestion pricing in f‌i ve metropolitan areas. In this

context, it is important to identify factors that inf‌l uence

successful implementation, as well as the problems or

dif‌f‌i culties associated with charging projects.  e authors

review, synthesize, and analyze worldwide experience

with urban road charging in order to extract lessons for

policy makers who are considering the implementation

of congestion pricing projects and for those who are

interested in the introduction of traf‌f‌i c management tools

to regulate entrance to city centers.

Congestion costs are emerging as one of the

most important challenges faced by metro-

politan planners and local public authorities

in developed economies. In the United States, the

costs of delays and excess fuel consumption rose to

$78 billion in 2005, important economic losses for

individuals and for the national economy (Schrak and

Lomax 2007). Consequently, policy makers at all levels

of government are searching for policies and strategies

to lower traf‌f‌i c congestion and its attendant costs.  e

traditional approach to reducing congestion costs has

been infrastructure enlargement and road investments,

but to date, the impact of this approach has proved

limited. A recent study by Winston and Langer (2007)

estimates that each dollar spent on highways only

reduces road congestion costs by 11 cents.

Based on implementation in

large urban areas outside the

United States, American policy

makers are increasingly consid-

ering the use of charges and fees

on road users to reduce traf-

f‌i c in heavily congested urban

areas (Geddes 2007). Congestion pricing is a credible

alternative to infrastructure investments because it

reduces congestion more ef‌f‌i ciently and without a

signif‌i cant investment of public funds (Parry 2002).

As a result, the U.S. Department of Transportation re-

cently selected f‌i ve major urban areas to receive funds

for pilot congestion charges projects.  ese projects

are intended not only to alleviate traf‌f‌i c congestion,

but also to identify factors that facilitate the successful

implementation of congestion charges and fees.

In advance of the f‌i ndings to be generated from the

studies of these U.S. cities, we draw on the experience

of cities around the globe that have implemented con-

gestion charges to reduce peak-time traf‌f‌i c in their city

centers. Specif‌i cally, we review, synthesize, and analyze

the results of studies that have examined the f‌i ve most

prominent cases of congestion charges implementation:

London, Singapore, Stockholm, Bergen/Oslo/Trondhe-

im, and Edinburgh. By identifying and examining the

factors leading to success or failure in these cities, this

article of‌f ers valuable lessons learned on the implemen-

tation of congestion charges for policy makers, plan-

ners, and transportation managers in the United States.

National and local characteristics and dif‌f erent insti-

tutional frameworks inf‌l uence perspectives on the way

in which road user charges are addressed. Debates on

road user charging in Europe have focused largely on

tolls versus budgets to fund motorways. In the United

States, the debate has mostly focused on the use of gas

taxes to fund non-toll motorways, and more recently,

some discussion of the use of tolls to fund motorways

has arisen (e.g., Bel and Foote 2009).  is article does

not deal with road user charges as a funding tool, but

rather their use as regulatory

tools (congestion charging) in

order to manage road demand.

 at said, an interesting ques-

tion that links congestion charg-

ing with transport f‌i nancing is

what to do with the net revenues

from charges—the improvement

962 Public Administration Review • September | October 2009