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Congestion charging in big cities

Major cities around the world face the problem of traffic congestion. Cars and other motorized vehicles have taken an important place in our culture, economy, lifestyle and therefore in our cities. The problem of crowded streets and inner-city highways has often become one of the main concerns of city councils.  The necessity to reduce the number of vehicles in the cities calls for effective policy responses, among which congestion charging is one option.  



Context within NORA

Relationship to needs:

Mobility: With the reduction of traffic density, transportation become easier for every type of vehicles. The average speed is increased which allows less time-consuming travel.

Health: The decrease of vehicles results in less CO2 in the atmosphere and a better air quality in the city. Limiting car use also encourages physical activity such as walking and biking alongside public transportation.

Security: The cars in the downtown areas are a threat to pedestrians; thus less cars would decrease the danger for pedestrians as well as decrease the rate of car crashes.


Relationship to resources:

Air: Traffic is one of the principal sources of air pollution; reducing car use in city-centers offers better access to cleaner air. In cities, an average 60 to 65% of the CO2 pollution is due to private cars.

Land: Transportation infrastructures take a lot of space. In urban areas, land is often scarce and the authorities struggle to divide it between housing, parks, industries, etc. By limiting the number of cars, less roads and parking spaces are required; space saved can be used for other purposes.

Energy: Nowadays, there is a big controversy on the remaining quantity of oil on earth. Moreover, the prices of fossil fuels are always reaching higher. Oil scarcity is a real threat to our lifestyle and livelihood which makes preserving oil a priority. As no efficient alternatives to oil for moving cars have yet been found, reducing the consumption by any means may be the best solution; limiting car use logically decreases gas consumption.


 Relationship to organizational forms:

Self provisioning cluster: Reducing the number of cars pushes people to share cars or go by their own means such as bikes or walking.

Community solidarity cluster: Policies take place at the city level, mobilizing the community formed by the residents and the users of the city transportation system to change their habits. It is a common effort that only works if a majority cooperate. Moreover, the reduction of individual car use allows people to focus on their direct neighborhood, creating a greater sense of community centered on a neighborhood or small village.

Sharing renting cluster: Reduced reliance on private cars results in a more frequent use of public transportation, and encourages car-renting/sharing. This policy also raises awareness about the sharing of the same city space, roads, streets with other people using different vehicles.

Committed services and sales: A policy to reduce car use at a city, or even bigger scale, requires relationships between the authorities and city-dwellers. The city provides services to replace cars and all the infrastructures needed as well as organizes payment for taxes and charges.


Related approaches to abundance

The concentration of cars is a major problem in cities where they creates congestion but it is also global issue. To reduce pollution and oil consumption in general, we need to find new means of transportation for domestic trips as well as worldwide journeys. It is also our whole way of living and of organizing space that we must rethink if we want to be closer to everything: housing, workplace, entertainment, grocery stores, etc.


Possibilities to reduce car use

The problem of the excessive number of cars in cities, and city centers in particular, has a lot of causes and therefore, a lot of possible solutions. Some of them can be done by anyone, taking a bike instead of the car, but for a real efficacy, measures affecting the entire city or metropolitan area are needed. There are several possibilities for cities, one of them being the promotion of public transportation. Most major cities already have a network of public transportation combining buses, underground and surface rail. The improvement of the mass transportation in cities is the most obvious alternative to cars but in numerous cities, the network is already well developed and often crowed itself. City councils have other options to get drivers out of their cars. Many cities around the world have developed bike-sharing system such as the "Vélib' " in Paris, "CityBike" in Wien or Wuhan public bicycles in China which is the most important with over 90,000 bikes. Such options need new infrastructures and the reorganization of roads to make it safe to ride and drive in the same roadways. The concept of complete street focuses on these issues. One of the possibilities to reduce efficiently the amount of cars in city centers is road or congestion pricing. This solution, used in several capital and minor European cities, limits the need for major infrastructures and earns the city money that can be used in other sectors.


An example of policy: the congestion charge

What is congestion pricing?

Congestion pricing is a policy that consists of taxing the vehicles entering a certain area of the city. This recent idea, which appeared first in Singapore in 1975, is often designed as part of a larger transport reformation plan. It usually has the initial goals to release the city center from its traffic jams. Another concern is to find a solution to the parking problems in downtown areas, and to decrease the CO2 level. The taxes are calculated to dissuade people to over-use cars but still allow a dynamic life in the downtown area. Every city has its own system to charge drivers and enforce the system. The prices vary; for example, London has the most expensive fees with £10 a day ($16). Moreover, the charge-zones are more or less extended, in London (20.7 Km2) and Milan (8.2 Km2) only the downtown areas are involved, whereas in Stockholm (30 Km2) the whole city center is a paid-zone. The size of the area is only meaningful once compared to the city size. For example, the congestion charging zone in London is 20.7 square kilometers which represent only 1 percent of the Great London area; Singapore, however has a zone of 7.25 square kilometers representing more than 7 percent of the whole city-state area.



The Singapore Area Licensing Scheme

The city-state of Singapore was the first to use a charging plan in 1975. The Singapore Area Licensing Scheme (ALS) was originally limited to the Central Business District between 7:30 and 9:30 am during the morning peak, Monday to Saturday. The initial scheme used a system of paper stickers with colors and shapes for different types of vehicles and  manual enforcement. The additional license to enter the CBD was S$3 ($2) a day. The system was extended in 1994 to 6:30 pm to cover the evening peak hours as well. The authorities chose the ALS for three principal reasons; it allows a dynamic and economically efficient CBD, the charging zones cover specific parts of the city and the enforcement is easy to implement. This charging system was accompanied by an increase in parking prices in the same area for both public and private parking places (Richards, 60-61).

The Electronic Road Pricing

With the economic development of the city-state, the number of car-owners has strongly increased, so in the 1990's, Singapore started research on an electronic system that would be more efficient. On September 1st 1998, the ERP (Electronic Road Pricing) was launched (Richards, 62). The new system uses an in-vehicle unit or IU, a transponder inside of the car into which the driver puts a "cash card". This card sends information to a control station and a payment is made. Those cards can be obtained at various banks and can be replenished on-line or at ATM's (International Technology Scanning Program). The latest generation of cards is called "smart cards" and allows parking payment as well as payment in various stores in the city. The control is done through Automatic Number Plate Reader (ANPR), cameras taking pictures of every license plate entering the zone. When there is no UI or not enough funds on the cash card, the vehicles is identified with its plate. For the lack of IU (in-vehicle unit) the owner must pay S$70 ($50) and S$8 ($6) for a lack of money in the card. These fines seem effective because the violation rate is less than 1% according to the ITSP's study. The system is working throughout the island of Singapore with different charges for various vehicle types, time of day and location. The types are: motorcycle (S$1.25), car, heavy goods vehicle, very heavy vehicle (S$5.0). For a car, the full license is S$3 and the off-peak license, S$2 (Richards, 64). In Singapore, every vehicle is subject to the charge except for emergency and military vehicles; visitors have to rent a transponder.

This new enforcement system quickly became popular because entering the CBD (Central Business District) only once a day is less expensive and Sundays are free (Richards, 65). The government also provided new park-and-ride spaces and improved the public transportation in the CBD.  Along with the city area, some of the most crowded expressways and arterial roads also use charging to limit congestion. The government targets are to maintain a 20 to 30 km/h speed in city streets and a 45 to 65 km/h speed in the expressways. To achieve its goals, the government revises the charging schedule every three months; for example, the expressways are charged on weekdays only from 7:00 to 9:30 am and 5:30 to 10:30 pm. The ERP generates a lot of funds for the government, 2008 for example it had net revenues of S$100 million ($72 million). This money is given back to the drivers as refunds on their vehicle taxes alongside its use to improve transit and roads (ITSP). The results  of congestion charging in Singapore are not as clear as they would be for other city because of the time frame. The experience is almost thirty years old now and in that period many parameters have influenced the transportation habits. The volume of traffic in the charging area has dropped by an average 18 to 21 percent and  by 10 to 15 percent in the downtown area. The number of vehicles entering the charging area is believed to have lost 25.000 vehicles per year during peak hours. On the highways, the speed increased by 20 percent. Another result of the ERP is the change in transport habits. Among the people entering the city, more than 63 percent choose public transport.



Since 2003, driving in the center of the British capital city is charged £10 on weekdays from 07:00 to 18:00. This bold campaign promise by London former major Ken Livingstone at first had raised skepticism. However, the idea seems to have seduced the Londoners since, considering Livingstone's election and re-election and that the system is still running today.  The system was launched on February 17th, 2003, and covered an area that included the City of London, the City (financial district), the West End and its theaters, and most of the main touristic sites including Buckingham Palace and the House of Parliament. The original zone covered approximately 5% of the city roads and 150.000 residents (Kemp, 85). The system uses cameras in the entrances of the charged zone to scan the license plates and compare them to the file of all the vehicles registered for the day. Each registration is made by the payment of the feeds by different methods of payment such as text messages. Exceptions are made for "clean" vehicles (according to European norms less than 75g/km of CO2) as well as electric cars and of course emergency vehicles.

Only two years after its launch, the congestion charge had led to an 18% decrease of the number of cars and 30% less congestion. The city buses and underground have also seen an augmentation of rides. In general, the air quality was improved and the number of car accidents decreased. One of the other benefits of this solution is the financial aspect. The measure did not require any important transformations in the city's infrastructures; in addition, collecting the drivers' fees, representing over $300.000.000, permits reinvestment in the public transportation network (Kemp, 86). The main goal, that is to decrease congestion, may not be a total success but the results of the charging zone in London are very encouraging. The congestion in central London decreased in the first years of application, but studies showed that by 2009, the traffic jams in London had returned to their rate of 2002. The reason is a progressive increase of traffic as well as the rearrangement of some areas into pedestrian or one-way zones. Nevertheless, the assessment is positive. The time spent in traffic jams was reduced by one third, traffic dropped by 20 percent and the average speed gained 19 to 25 mph. The limitation of traffic in the city also resulted in a drop of 70 road accidents a year. Moreover, a change in transport habits was noticed in the rate of each types of vehicles entering the charging zone. The car rate dropped by 34 percent while buses, taxis and bicycles have increased by respectively 21, 22 and 28 percent. These rates can be explained, for buses for example, with a virtuous circle. Indeed, alongside the launching of the charging system, the city of London increased drastically the number and quality of its buses encouraging travelers to shift from private car to bus. With more and more bus users and a reduction of global traffic, the bus congestion delay decreased by almost 50 percent, encouraging even more people to shift to this mode of transportation. Approximately 50 percent of former car users chose to shift to buses. The underground of London didn't experienced the same boost in popularity mostly because of the ticket cost and a long closure of the main line for maintenance. Finally, a study from King's College London, shows a decrease of 20 percent in the global CO2 level in London since the charging system (Leape).



The idea of road pricing in Stockholm, Sweden, first emerged in 1992 with the Dennis agreement. The agreement, negotiated by the Bank of Sweden's governor, Bengt Dennis, emerged from a conference gathering the leaders of the main political parties. The idea was to find an agreement on a general transportation policy. The initial project was to build new roads and to improve public transportation in and around the capital city, and this is where a congestion tax was first mentioned. The goal of this tax was to fund the road construction and limit traffic in Stockholm. The system was not very popular and in 1997, the government withdrew the funds. However, the question was never really off the table and in 2003, a congestion tax was considered once again by the city council (Richards, 73). Originally planned for a try-out in 2005, the tax had new objectives:

  • Reduce traffic by 10 to 15% and increase general speed in the most crowded roads;
  • Decrease the emissions in the city;
  • Provide improved street environment;
  • Raise funds to use in public transport improvement.

The system was put to a test in January 2006 in the city center for seven months. At the end of the trial, the program was stopped, and a referendum gave the residents of Stockholm the choice to carry on with the tax or not. The vote, on September 17, showed a large support of the inhabitants with more than 50% "yes" to the pursuit of the tax (International Technology Scanning Program).The referendum gives us interesting information on the public opinion regarding such schemes that affect their day-to-day life. Like in London where the mayor Livingstone was re-elected after launching the charging zones, here we can see the support of the population concerned. In his study, Congestion charging in London, Martin G. Richards argues that the residents of Stockholm realized the positive impact of the tax (74). Indeed, during the demonstration in 2006, the charging system had achieved a drop of 10 to 15% in traffic, the congestion was reduced by 20% in the CBD and the emissions of CO2 decreased by 10 to 14% (International Technology Scanning Program). Moreover, according to the study of the ITSP, after the end of the trial, traffic in Stockholm returned to normal proving the system's efficacy (Richards, 73).

Practical application

The Stockholm congestion tax was permanently re-introduced on August 1st, 2007. It features a cordon around the city center, with 18 control points that charge vehicles entering and exiting the CBD on weekdays. The system is operational from 6:30 am to 6:30 pm and the charge varies from SEK10 ($1.5) to SEK 15 ($2.25) depending on the time of day, increasing with the peak hours (ITSP). Some vehicles are exempt from the tax such as emergency and disabled people's vehicles, city buses, taxis as well as foreign cars (Richards, 73). Moreover, certain types of "clean cars" using alternative fuel are exempt as well as the inhabitants of the Lidingö island who have to cross the CBD to join the rest of the country, though they are only authorized a 30-minute crossing, after which they start being charged (ITSP). In total, the exemptions represent about 30% of the cars entering Stockholm's CBD (ITSP).

Payment system

At the beginning, Stockholm congestion tax used a dedicated short-range communication (DSRC) system to verify the payment. This system uses antennas to communicate information between the car passing the control point and a control central (Richards). This system was replaced in 2007 by automated number plate recognition (ANPR) that captures the image of every license plate. At the end of each month, a bill is addressed to the car owner with the tax amount for the previous month. This bill can be received by mail or electronic mail through an on-line bank account, or the amount can be directly retrieved from the owner's bank account with a direct debit arrangement called Autogiro (ITSP).


Adaptation to developing cities

In this page we have focused on cites where the congestion pricing scheme was well accepted and strong, but all those cities are among the wealthiest of the world. In those cities, congestion is an important issue. But, when we consider the problem under the philosophy of NORA, the urgency is even greater in underdeveloped and developing cities, where traffic is often much more anarchic. The World Bank has recently wished for major third world cities to adopt some kind of traffic regulation and pricing system, in order to address pollution and the chaotic aspect of traffic, and to raise funds to finance their weak infrastructures.

The adaptation of congestion charging to big cities, in India or African developing cities for example, seem complicated at first. Indeed, the technology and infrastructures are expensive and the system needs a strong administrative power to be enforced. Moreover, in many cities, there is little or no registration of cars and car owners. Although a congestion charging system, by smoothing the traffic, can allow a better access to the city; the price might totally exclude the lower middle class from using cars to access the central city (those people who just barely have enough money to afford a car).

Nevertheless, Teheran, the capital city of  Iran, is a valid proof that it is still possible (ITE@GT). For developing cities, the model needs to be adapted. The scheme needs to be more flexible and extended to all the different types of vehicle that crowed the city streets. For example, the cycle rickshaws represent a big part of the traffic in some Indian cities; the city council may need to consider whether and how to include them in the charging scheme. The enforcing system the most frequently adopted is the one used in London, with cameras, because it is the cheapest. However, since its launching in 1979, the Tehran congestion charging has not reach a total success and the amount of fraud is still very high (Teheran Congestion Charging). Moreover, Teheran is a relatively wealthy city due to the Iranian oil. It is a good example of the difficulties that third world cities may face if they consider congestion charging.

Strengths and weaknesses

The congestion charging system is an effective way to improve the problem of traffic jams in inner cities. However, it is not perfect and cities which are considering it must be aware of its advantages and its flaws.


  • Presents a source of funds for the city administration to use for other purposes or to redistribute.
  • Delays or eliminates the need for bigger infrastructures (more highways, roads,…)
  • Allows flexibility in prices, hours and area concerned.
  • Allows the city to tax the people who live outside of the city boundaries but still use the infrastructures.
  • Reaches several goals such as decreasing traffic jams, time of trips, number of vehicles in the city, and contributes to reducing the overall air pollution and car accident rate in the city.
  • Redirects drivers into the public transportation system.
  • Encourages people to share rides or use clean modes of transportation such as the bicycle or walking.
  • Promotes a friendlier living and working environment by reducing the stress and anger generated by time wasted in traffic jams.


  • Involves high costs at launching and in maintenance of the high-technology equipment.
  • Is complex to enforce and control.
  • Increases the traffic on secondary roads, the traffic jams are simply moved to other areas.
  • Encourages people to visit the  malls out-side of the city and abandon the downtown shopping areas.
  • May under certain circumstances increase the gap between those who can easily afford to drive and those, poorer who have to use the often overcrowded and overpriced public transports. Moreover, the annual charge, added to other taxes on cars prevent some lower middle income families to buy a car, reducing their mobility.
  • Can be seem as an invasion of privacy and cause for new frauds.


Important conditions

The congestion charge is a fairly effective method to reduce the number of cars in cities, but it is not applicable everywhere. Prior to deciding on such scheme, the city government must do a deep and thorough study of its traffic pattern and of the functioning of its economic life. The charging system can be hurtful for an economy depending on outsiders to survive. The major drawback of the charging system is its cost. A city which wants to use this system needs to be financially strong enough to support the launching cost but also the expensive maintenance. For that, the system has to be profitable, which means enough circulation to ensure incomes. That rules out smaller cities that don't have the funds and the financial stability to maintain the system.

It may be unrealistic to consider a charging scheme in under-developed or developing countries. The charging system uses the money from the city dwellers, who may not be affluent enough to support the cost, and some of whom may be effectively driven out of the city. However, it can also be argued that congestion charges are paid by the most affluent portion of the city's population (those who can afford to own cars), and that it is precisely they who are the main beneficiaries of the city's infrastructure and should therefore pay for it. In cities with a road system that lacks easily controllable access points, it may also be difficult to prevent an overwhelming number of frauds that would make the whole system bankrupt.

A city considering a congestion pricing zone also needs to have a strong public transportation network that is sufficiently dense and far-reaching to compensate the loss of mobility from switching from car to public transport. The ticket price has a big part in the mode switching; it should be low enough to be cheaper than the congestion charge but guarantee enough income so the company keeps a high standard of transport quality. An inter-modal system of transportation is a good asset for a city. If the same card allows to take the bus, the tramway or the underground, than the network is more effective and easier to use. However, the quality of the transportation network alone is not enough, it must have the possibility to grow. The installation of a charging area will bring a new wave of travelers; if the network is already overcrowded and has literally no place to expand by building new lines, than people won't use it. In old and big cities like Paris or New York, where the underground has very little place to expand further, the city government may need to find other ways to improve the public transportation or find a solution other than congestion charging.

Moreover, the installation of a pricing zone must be the fruit of an agreement among all stakeholders, such as the city and other levels of government, representatives of the city businesses, of the inhabitants of the inner city and of the suburban area, etc. A congestion charging scheme can change the dynamic of a city. Stockholm is a good example of consultation with the referendum that was conducted. Several cities in the world have considered introducing a charging system but have renounced it. In Edinburgh, 75% of the population voted "no" to charging system in a referendum in 2005, and in Copenhagen, it was the political power that decided against a system similar to the one in London in 2012. Hong Kong, after a successful try out from 1983 to 1985, abandoned the congestion pricing system due to the population's opposition. Finally, in New York a project for a trial in Manhattan was refused in 2008. Nevertheless, many studies are being conducted on the existing examples in many cities and some of the projects that were abandoned may come back as the council changes to another political party or with the conduct of a new referendum. Cities like San Francisco, Seattle, Chicago have been planning on a similar project and even megalopolises such as Beijing and Sao Polo are considering it.


Related Approaches to greater Abundance

Car sharing

Bus rapid transit

Local rail systems (light rail, subways, etc.)

Complete Streets

Transit-oriented development (TOD)

HOT lanes (high-occupancy toll or express toll lanes)

Links and stories

Singapore Ministry of transport web site

Congestion pricing in Milan, Italy

Interview of London's mayor by the BBC

How the congestion tax works in Stockholm (podcast)

Streetfilms. 2011. Moving Beyond the Automobile (series of videos, including one on congestion charging)

Teheran Congestion Charging


Bae, Chang-Hee C., Richardson, Harry W. eds. 2008. Road Congestion Pricing in Europe. Edward Elgar.

Richards, Martin G. 2006. Congestion charging in London: The policy and the Politics. Palgrave McMillan.

Seattle Transit Master Plan Briefing Book. 7 Best Practices: Congestion Pricing.


Bae, Chang-Hee C., Richardson, Harry W. eds. 2008. Road Congestion Pricing in Europe. Edward Elgar.

City of Sydney.11, sept. 2013. "Car-sharing". 4 Dec. 2013. Tips for Driving in Europe. (image).

Dekoster, J., Schollaert, U. 1999. Cycling: the way ahead for town and cities.

Federal Highway Administration. 2013. Lessons Learned from International Experience in Congestion Pricing.

Gerdes, Louise. ed. 2008. Transportation. Greenhaven Press.

Institute of Transportation and Development Policy.11, Sept. 2013. Traffic Reduction.

International Technology Scanning Program. 2010. Reducing congestion and funding transportation using road pricing in Europe and Singapore.

ITE@GT, The Institute of Transportation Engineers. 4, Dec. 2013. Congestion Pricing (Part 1 of 2): New Frontiers.

Kemp, Roger L. ed. 2007. Cities and cars: a hand book of the best practices. McFarland & company.

Leape, Jonathan.2006. The London Congestion Charge. Journal of Economic Perspectives.

Linier Parking Solutions. 4 Dec. 2013. Congestion Pricing Only True Road to Relief. (image).

Richards, Martin G. 2006. Congestion charging in London: The policy and the Politics. Palgrave McMillan.

Tehran Traffic Control Co. 4 Dec. 2013. Tehran Congestion Charging.

Weidler, Tyler. ed. 2012. The Reference Shelf : U.S National Debate Topic 2012-2013: Transportation Infrastructure. H.W. Wilson.


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