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without any move to address congestion it will reach a crisis point.


The cure for chronic congestion: accurate road pricing, not more roads

Congestion and its damaging impacts – such as the harm of idle cars pumping polution into the environment while stuck in traffic – could be fully eradicated with efficient road-use charges, according to new research from the University of Cologne.

Professor Peter Cramton says that by harnessing readily-available technologies and employing similar congestion pricing methods used within electricity markets, the chronic and worsening issue of traffic congestion could be eliminated through tailored charges for road-users.

The congestion price would be determined by which part of a congested road, and at what time, the driver chooses to use.

Cramton suggests that the time is not only apt for an innovation in road-use charges, but that without any move to address congestion it will reach a crisis point.

The average driver in the US spent 42 hours in congestion in 2016, with that figure spiking significantly in urban areas such as Los Angles and New York, where the average person was stuck in traffic for 104 hours and 86 hours respectively that year. On top of this, the costs of congestion prove to be astronomical, reaching into the billions in the US, with the ‘congestion invoice’ for fuel and time lost reaching $160 billion in 2014, and totalling around $1 trillion worldwide each year.

These costs have often led to calls for more roads to be built to alleviate heavy traffic build-up. However, Cramton suggests that this method, like that of introducing ride-hailing services such as Uber or Lyft, does virtually nothing to reduce congestion, he says: “if new unpriced capacity is added, the road will become as congested as it was before the capacity addition.

“Traffic congestion is one of the biggest challenges of modern societies. Fortunately, technology – with its ability to determine the location of our phones within a few metres of their exact locations – makes the idea of accurately calculating someone’s road-use feasible, and could therefore allow us to largely eliminate congestion and with it the inefficiency, frustration, and unfairness that comes with the current system.”

If efficient road-use charges were to be applied universally, congestion and its consequential social costs would be eliminated, and would also bring about a number of advantages for road-users worldwide, including: a marked improvement in environmental quality; more reflective charges in which road-users pay in proportion to use; and greater road safety, achieved through a less-congested, more consistent and predictable flow of traffic.

This research was published in Journal of Institutional and Theoretical Economics.


For more information, a copy of the paper, or to speak to Professor Peter Cramton, contact Jonny Stone at BlueSky PR on or call +44 (0) 1582 790 704.

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