Congestion pricing: Lessons from abroad

Dr Patrick Carvalho
Insights Newsletter
31 January, 2020

Chronic road congestion is a global epidemic, plaguing poor and rich countries alike. In dozens of cities around the world, from Bogota to Rome, from Moscow to Boston, from Toronto to Dhaka, from Sydney and Melbourne to Auckland and Wellington, the average motorist wastes more than a hundred hours every year idling behind the wheels in overcrowded routes.

More than just a driving nuisance, congestion constitutes a serious global economic problem. In response, cities across the globe are turning to decades of scientific research and empirical support in the use of congestion pricing to manage road overuse.

By letting drivers face the costs of adding a vehicle on clogged roads, congestion charges encourage commuters to find trip alternatives such as other travel times, routes and transport modes.

In our new report released this week, we show that not all congestion pricing schemes are created equal. That means we can learn from those cities that have got it right (such as Singapore and Stockholm) and those who have got it wrong (like London that still infamously ranks among the most congested cities in the world).

The first takeaway is that congestion charging rates do not need to be high to produce effective results. A prime example is the Singaporean scheme with collection points charging from as little as NZ$0.51 to a maximum of NZ$4.05, ensuring a steady flow of vehicles even during rush hour.

Another promising lesson is that technology is on our side. Recent advances in geolocation technology have reduced the barriers of costly congestion pricing infrastructure.

In New Zealand, for instance, the same technology already being used to collect electronic road user charges on diesel-powered vehicles could be easily converted to charge for time and location (i.e. effectively implementing congestion pricing).

The international experience also shows that in well-designed schemes, the public does not take long to start backing congestion charging once they get used to it and see the benefits. A case in point is Stockholm: public acceptance more than tripled to 67% once its congestion pricing was up and running.

In short, congestion charges work, and the experiences of these international cities can be an excellent blueprint for New Zealand to learn from and tailor a road pricing scheme that is just right for us.

When the price is right, a proven solution to chronic road congestion is ours for the taking.


Stay in the loop: Subscribe to updates