Reduce VMT and Emissions by Congestion Pricing

Description: Traffic congestion is a growing issue in urban areas around the world. In the U.S. alone, the economic cost associated with the time lost by drivers due to traffic congestion is estimated at $74 billion in 2024, according to the transportation analytics firm INRIX (see links below). In addition, slower-moving, stop-and-go vehicles have been shown to produce higher levels of pollutants, which are often concentrated in hot spots with poor air quality. As a result, neighborhoods adjacent to congested roadways, which are often home to lower income populations, experience greater exposure to negative health effects of car pollution.

Congestion pricing is a way of harnessing the power of the market to reduce emissions and other negative impacts associated with traffic congestion and overall vehicle miles traveled (VMT). Congestion pricing works by shifting some rush hour highway travel to other transportation modes – such as walking, biking and use of transit – or to off-peak periods. Outside of the U.S., London, Singapore, Milan, and Gothenburg and Stockholm Sweden have implemented various forms of congestion pricing and realized reductions of up to 20 percent in pollution levels.

New York City implemented congestion pricing on January 5, 2025, charging most vehicles $9 to enter Manhattan’s central business district (CBD) during peak hours: 5 am to 9 am on weekdays and 9 am to 9 pm on weekends. In the first 100 days, 6 million fewer cars drove into lower Manhattan compared to a year earlier. In the same time period, the New York City Business Improvement Districts reported 1.5 million more visitors year over year. Ridership on commuter train lines and buses is up. Average speeds within the CBD increased 15 percent, reducing the number of slower-moving, stop-an-go vehicles. While it’s too early to attribute environmental benefits to the NYC congestion pricing program, long-term improvement in car pollution is expected to be consistent with results in London, Singapore and Stockholm.

Congestion pricing can take many years to implement. In the U.S., studies are currently underway in Los Angeles and Boston while studies in San Francisco and Seattle have been paused. Delays are often due to the need for voter approval, concerns over the equity of congestion pricing, changing traffic patterns especially following the Covid 19 pandemic and the evaluation of other strategies, such as dynamic toll lanes, to reduce congestion.

Goal: Reduce vehicle miles traveled (VMT) by congestion pricing. Reduced VMTs will reduce GHG emissions by the city’s transportation sector and incentivize use of other modes of transportation.