What is the economic case for road pricing?
In market theory, traffic congestion can be seen as a cost like any other – and it’s not the only cost driving imposes on others. Every journey we make increases congestion, local pollution, the emission of greenhouse gases and the risk of accidents for other people. A pricing scheme that charges more to travel at the peak times and on popular roads would encourage drivers making less pressing journeys to avoid busy periods and routes – cutting congestion for everyone. The evidence from London’s flat-rate (£8 per day) congestion charge is that financial incentives work and that even a small response from drivers can greatly improve traffic flow. There, a 15% reduction in actual journeys reduced delays by 30%. Although some smaller retailers inside the congestion zone say business has suffered, the cut in congestion provides an overall boost to the economy, making essential business travel and the movement of goods easier and more predictable. According to the Government study, the chan
