Question

In: Economics

Describe how congestion taxes have been implemented in different cities.

Describe how congestion taxes have been implemented in different cities.

Solutions

Expert Solution

Based on their car footprint, it is the need of the hour to enforce road usage fees, which is how much road space a commuter uses during his / her commute. Optimal use of the road occurs when the road is loaded with vehicles that travel at the speed specified. Any additional vehicle added to this lane, however, reduces all the other vehicles on the road speed. In order to use a congested lane, a congestion charge is charged, usually by a commuter who contributes to further congestion on the road. This is a typical pictorial depiction of road use:

The bulk of the carriageway is filled with private vehicles by making roads fairly open to all drivers, thus increasing the area available for public transport. It creates an unjust situation where, at the cost of a very few users of private vehicles, a majority of public transit users are inconvenient. A private vehicle congestion charge can be a way to equalize the use of road space. In India, road taxes and tolls are collected from drivers, but there are currently no user fees that correspond directly with the footprint of road usage

Congestion charges in cities such as London, Singapore and Sweden have been widely adopted and used. Such cities charge private vehicles to enter traffic areas in some heavily populated and gridlocked urban spaces such as the downtown area. The average commuters in London gained benefits in terms of higher road speeds, decreased air and noise pollution, reduced traffic in the area where the fee was imposed and the highest number of bus drivers in 2011, following the introduction of the congestion charge in 2003.

Congestion charges such as a central city cordon (London, Stockholm) or using an Electronic Road Pricing (ERP) system as seen in Singapore are currently being introduced in different systems. Depending on the structure and form of area, the approach used to enforce congestion charges varies — whether it is radial, liner or grid planned. An ERP program to enforce congestion charges will work well for major Indian cities such as Mumbai, Delhi and Bengaluru which experience daily traffic snarls. At peak times, such a system will take into account traffic movements on major roads.


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