Prepared by: Cambridge Systematics for AASHTO and NCHRP, 2009.
FHWA introduced the concept of congestion pricing to the HERS-based Condition and Performance Report in the 2006 issue. This research-based approach dramatically diminishes investment requirements and generates vast amounts of revenue – creating a swing on the order of $50 billion per year. The report indicates that the average prices to produce this effect were on the order of 20 cents per mile, ranging much higher where necessary, and leaving many questions.
This NCHRP research examines the assumptions and analytical methods used by FHWA to quantify the relationship between cost and travel demand, concluding that several issues need to be better understood in order for results to be properly interpreted. Chief among them are that (1) daily traffic analysis understates the congestion charges, (2) ignoring network effects paints an incomplete picture of the potential changes, and (3) technological barriers cannot be ignored.
The economics and practical considerations of congestion pricing are discussed. The purpose of congestion pricing is to expose drivers to the full social cost of road use through directly charging for those costs that vary with congestion; congestion pricing charges everyone for something for which they had not previously been charged. The ultimate economic argument is dependent on the incidence of the direct and indirect benefits and costs of congestion-free travel, who pays the tolls, and how the toll revenue is spent. Practiacally, there are numerous ways that congestion pricing can be carried out, and each can produce different traveler responses. A related issue concerns the considerable barriers associated with the techonology of implementation. The equity and social justice effects of congestion pricing are not well understood.