congestion pricing


The NYT piece suffers from peculiar worldview of American and European journalists who think all good innovations come from their part of the world (Singapore pioneered congestion pricing for road use in 1975), but let’s focus on the positive: the drawing out of lessons from Thaler and Springsteen about the need to address hardwired perceptions of fairness: Technology is making “variable” or “dynamic” pricing — the same strategies that ensure a seat on an airplane, a hotel room or an Uber car are almost always available if you’re willing to pay the price — more plausible in areas with huge social consequences. Dynamic pricing of electricity could help bring down pollution, reduce energy costs and make renewable energy more viable. Constantly adjusting prices for access to highways and congested downtowns could make traffic jams, with all the resulting wasted time and excess emissions, a thing of the past. Any sector where supplies tend to be fixed but demand fluctuates — the water supply, health care — would seem like prime candidates for variable pricing.
Now that the battle over ICTs is almost won, we should start thinking about how it can help improve infrastructures, such as transport and energy. The NYT has a fascinating overview, but congestion pricing made possible by ICTs is what caught my eye the most. Perhaps because I had written about it as a solution to chronic congestion in Colombo and continue to be deeply interested in transport issues. In 2006, Stockholm experimented with congestion pricing, charging cars up to $4 to enter the downtown area, depending on the time of day. The cars were monitored with RFID cards and webcams that photographed license plate numbers.