CONGESTION PRICING: ISSUES AND OPPORTUNITIES

Metropolitan Planning Organizations (MPOs) considering the adoption of a congestion pricing policy need to clearly understand several aspects of congestion pricing: (1) What is the rationale for congestion pricing? How does it differ from the traditional fuel tax? (2) How effective is congestion pricing with respect to the MPOs' objectives? (3) What are the critical issues and concerns which must be addressed before implementation can proceed? (4) What types of congestion pricing applications are reasonable in the short term and in the long term? This paper addresses these questions and offers some thoughts on how MPOs can proceed towards implementing this strategy. An MPO may seek to use congestion pricing as a means to achieve any or all of the following objectives: (1) manage congestion; (2) improve air quality; (3) secure adequate funding for transportation investments and services. The paper demonstrates a sketch planning procedure to analyze a congested urban area of about 1.5 million population in order to estimate effectiveness of congestion pricing with respect to the above objectives. The major issues with respect to implementation may be categorized as either technical or political. The paper discusses the major technical issues -- technological compatibility among geographic areas and modes, enforcement, privacy, price determination, and estimation of the impacts of alternatives. Use of the conventional four-step travel demand forecasting models to estimate impacts is demonstrated with a dataset for a small hypothetical urban area. The paper also discusses the political issues, i.e., public acceptance and interjurisdictional cooperation, and a three pronged strategy to help develop public support based on use of revenues from tolls. Congestion pricing can be applied at three successively larger scales: on a facility, within an area or sub-area of the region, and regionwide. The paper discusses how urban areas could begin to test the impacts of differential pricing on existing and new facilities. Also discussed is area pricing, involving pricing within a small geographic area such as a Central Business District or a major suburban activity center, which may be introduced through licensing schemes, cordon tolls or parking pricing. The prospects for regional scale application are projected.