There is an interesting piece of news coming out of Stockholm which should be reassuring for the both queueing theorists and environmentalists around the world.
Exactly 40 years ago appeared the first academic paper that tried to combined consumer behavior and queueing theory. The main idea of Naor’s paper was that a resource (in our case, a road) would always be more congested than “planned” (by a social planner) since people do not internalize the impact of their decisions on other users of the resource. The solution of the paper is to charge people a tax, which equals their externality on others.
All of that was theory. Since then a few places, such as London and Singapore, introduced congestion pricing (“Importing a Decongestant for Midtown Streets”, NY Times, 2008 ), and some, such as New York, have failed to introduce (“Congestion Pricing Plan Dies in Albany”, NY Times).
The most recent reassuring example that congestion-pricing works came from Stockholm. Stockholm has had a congestion charge since January 2006. Cars that enter the city center must pay a congestion tax, which varies depending on the time of day. Today, the Stockholm City Traffic authorities have released some interesting numbers:
The Stockholm Congestion Charging System, created by has significantly improved access to the Swedish capital by halving queuing times on access roads to the city in the mornings. City traffic is down by 18% and CO2 emissions in the inner city have been cut by between 14 and 18 percent.
So, as expected, the waiting times are halved and the traffic is down by 18% (consistent with the 20% in London). The nice and maybe not surprising part is that congestion pricing also reduces Co2 emissions. A real congestion pricing should be based on the real time congestion (as planned in Singapore), but we can see already fairly significant results with a simplified version.