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Congestion charging: It works!

28 January 2020 (Wellington): New Zealand can learn from international experiences showing congestion pricing systems can be successfully introduced – and with the support of the public, says a new report released today by The New Zealand Initiative.

Pricing Out Congestion: Experiences from abroad describes how cities around the world are turning to the decades of scientific research and empirical support on using congestion charging to manage chronic road overuse.

It can be done
The first congestion pricing scheme was implemented in Singapore in 1975, and over the years has embraced evolving technology, moving from a paper-based system to later this year, launching its new satellite-based congestion pricing technology.

Following the successful Singaporean experience, other cities followed suit with different variations of pricing schemes introduced in Durham (2002), London (2003), Dubai (2007), Valletta (2007), Stockholm (2007), Milan (2012) and Gothenburg (2013). New York City is also preparing to implement a congestion charge as early as 2021.

It works
Congestion pricing works, with economists and transport experts agreeing that congestion charging is the single most active way to reduce overcrowded road use.

Recent advances in geolocation technology have reduced the barriers of costly congestion pricing infrastructure. And in New Zealand, the technology that is already being used to collect electronic road user charges on diesel-powered vehicles could be easily converted to charge for time and location.

Empirical studies show us that small charges equate to reduced travel times and traffic volumes. As a result, societies benefit from shorter, safer and more reliable commutes, higher levels of productivity and wages, and a valuable source of information for future transport investments.

The public will support it
“International experience suggests people really like congestion charging once they get used to it and see the benefits,” said Dr Eric Crampton, Chief Economist at the Initiative.

“Badly designed schemes aimed at raising revenue rather than curbing congestion can struggle to find support. Charges in better-designed schemes can be unpopular on day one, but in Stockholm, most people supported congestion charges two years after they were introduced, and support was higher than 60% in subsequent years.”

Looking at New Zealand, we can also see public support for the introduction of congestion pricing. In a 2017 survey conducted by the Automobile Association (AA), responses showed that two-thirds of Auckland drivers think, “the Government should consider charging tolls on congested roads to encourage people to avoid them at busy times.”

So why are we still waiting?
Despite our major political parties supporting congestion pricing, New Zealand will not see a successful system launched unless the government of the day is prepared to address the issue and take the time to come up with a system that works for our specific landscape. And as we head into an election year, 2020 is the perfect time to act.

You can find a copy of Pricing Out Congestion: Experiences from abroad, attached at the bottom of this page.

You can read the first report in our transport series, The Price is Right: The road to a better transport system (November 2019), here.


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