Analysis
16 Jun 19

Congestion tax inevitable?

Lately various cities have been considering implementing a congestion tax. During the UITP Global Public Transport Summit, the UITP claimed that implementing a congestion tax will turn out to be inevitable for cities. 

Why a congestion tax?

While many cities are implementing diesel bans, or low emissions zones, and are pushing for electrification of transport, another problem still remains unsolved: traffic congestion. The recently published TomTom Traffic Index reveals how cities are struggling with their current mobility situation, with increased congestion among the biggest challenges.

A congestion tax will not address the pollution rate of cars, but the occupancy rate and use of cars in order to reduce the number of cars on the road – polluting or not. Or, as UITP stated in a recent report, ‘replacing all cars with electric ones is still not a sustainable solution in terms of traffic congestion’. 

From traffic congestion to public transit

Yet, the UITP emphasises two important characteristics of congestion tax:

  1. It is not imposed to discourage car ownership but rather to discourage using cars for short distances,
  2. The money raised with the congestion tax should be invested in public transit (or other mobility alternatives).

The UITP argues that “While large-scale public transport investment projects are undoubtedly expensive, they are significantly less expensive than the direct cost of congestion, which can seriously harm [urban] competitiveness, affecting travel time reliability and business productivity.”

For instance, the recent decision of New York City to tax motorists for driving in parts of downtown Manhattan from 2021, is expected to create annual revenues of $1 billion, and will be used to top up the annual investment in public transit of $25 billion.

Efficient but unpopular

Although the measure seems logical, many cities struggle with implementing such an unpopular tax. Yet, traffic congestion indexes have shown that cities that implemented a congestion tax reduced their level of traffic congestion significantly.

Stockholm, for instance, has seen a 20% drop in car trips soon after introducing a congestion charge – not to mention the significant drop in emissions. In Stockholm, the revenues of the congestion tax are used to investment in a motorway tunnel and new metro stations. To give you an idea: during peak hours in Stockholm, eight out of ten journeys are made by other transportation means than cars. 

Hence, a congestion tax is an effective albeit unpopular measure to cope with traffic congestion. Which is why various cities are struggling to get it implemented. The idea of a congestion tax in Manchester, for instance, was rejected by referendum, but Clean Air Zones will be implemented as an alternative. New York City on the other hand will become the first US city with a congestion pricing plan, although it took them months of negotiation and the rules will not be in effect before 2021. Considering the example of Stockholm, and soon of New York City, many cities will probably follow their lead, addressing traffic congestion and hence increasing commuter’s mobility (in terms of time and money). 

Authored by: Fien Van den steen
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