URBAN CONGESTION: A European Perspective on Theory and Practice

Growing urban transport congestion is a major cause of environmental problems, as well as delays. One may argue that this is a classic problem of externalities and can be readily corrected by means of the price mechanism. However, although interest is increasing in pricing as an element in any solution, the answer is not so easy. Despite the falling cost of microelectronics, urban road pricing remains complex, expensive to administer, and politically controversial. Nevertheless, modeling exercises and limited practical experience suggest that most, if not all, of these problems can now be overcome and that road pricing may now be successfully implemented. But the continued opposition to road pricing makes consideration of the alternatives necessary. Indeed, both for political and economic reasons, road pricing appears much more likely to be successfully implemented as part of a package of measures than in isolation.