Nobel

• New York City is poised to launch the first congestion pricing plan to reduce traffic in a major U.S. metropolitan area.
• Like many journeys in the Big Apple, this one has been punctuated by delays.
• Once the system starts up, however, it’s expected to significantly reduce gridlock in Manhattan and generate billions of dollars to improve public transit citywide.
• As an urban policy scholar, I’m looking forward to seeing New York’s plan go into effect.
• But given the heavy costs that traffic imposes on public health and productivity, I’m encouraged to see a major U.S. city finally test this approach.

Nudging drivers

• Congestion pricing is a response to externalities – costs or benefits that are generated by one party but incurred by another.
• Clogged city streets and air pollution are externalities created by urban car users, many of whom live outside the city.
• This approach is behind behavioral economics, the policy strategy of using “nudges” that preserve choice but encourage certain actions.

Public transit receives priority

• The New York plan was presented to the board of the Metropolitan Transit Authority in November 2023 after years of study and a detailed environmental impact assessment, required by federal law.
• It also would generate US$15 billion for capital improvements to the city’s public transit system, including making stations accessible for passengers with disabilities and buying new electric buses and commuter rail and subway cars.
• More than 75% of all trips into the central business district are made by public transit.

• Over several months of public hearings, the MTA heard both broad support for congestion pricing and thousands of requests for credits, discounts and exemptions, most of which were denied.
• The limited number of exemptions includes private commuter buses, school buses and city-owned vehicles, including emergency vehicles.
• New Jersey is suing the MTA, arguing among other things that the plan is unconstitutional because it burdens interstate commerce.

Starting the journey

• And how will commuters respond when they find that trains and subways initially are more crowded, before capital upgrades improve the system?
• But freedom for car users has imposed health and economic costs on millions of New Yorkers for many years.
• But if New York’s experiment succeeds, it could provide a model and valuable insights for other traffic-clogged U.S. cities.

John Rennie Short does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.