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From New York to Guangzhou: Lessons Learned from Congestion Pricing
Guangzhou opened a new BRT system to help reduce traffic, but experts say other solutions, like congestion pricing, should also be considered. Photo by everywhereATonce,

Guangzhou opened a new BRT system to help reduce traffic, but experts say other solutions, like congestion pricing, should also be considered. Photo by everywhereATonce,

As heard today on The New York Times Dot Earth blog, Chinese officials in Guangzhou — China’s third largest city and the capital of Guangdong (China’s wealthiest province) — are considering congestion pricing as an option to address increasing traffic woes.  In Andy Revkin’s “Postcard from a Guangzhou Traffic Jam,” Charles Komanoff, a transportation and traffic specialist from New York City who advised Mayor Bloomberg on a congestion pricing plan for Manhattan’s busiest blocks, draws lessons learned from Bloomberg’s failure to win state Democrats’ approval of the proposal to Guangzhou.  Komanoff presented his experience with the NYC plan in an “International Symposium on Analysis and Countermeasures of Traffic Congestion in Urban Centers,” noting that because traffic gridlock affects every major Chinese city, he along with the other invited speakers were “tailed by the media as if we were rock stars.”

Celebrity stardom aside, Komanoff makes a few interesting points with regards to the prospect of congestion pricing for China:

Transport solutions like Bus Rapid Transit (BRT) and subway systems may not be enough to address the rocketing pace of transportation demand in Chinese cities like Guangzhou. Guangzhou’s barely a month-old Bus Rapid Transit system is already attracting a mind-blowing 800,000 passengers a day, which Komanoff remarks is about half the number of people riding NYC city buses.  This point seems to suggest that while BRT may be a successful solution for congested streets in other rapidly developing contexts like Mexico City, it is not a transportation cure-all, especially for cities like Guangzhou, which may soon exceed the capacity and benefits of a BRT system along with other public transport solutions, like subway lines.  Already, Guangzhou has built five subway lines since 1999 and plans to have 20 routes covering at least 500 kilometers by 2020.  Instead, Komanoff suggests the Chinese need to be looking beyond BRT and subway systems to implement a range of solutions to ease traffic congestion.

Out of necessity, Chinese officials are now considering congestion pricing. Rising double-digit car ownership and expansion outpacing the city’s provision of transport options mean that the government is more seriously considering congestion pricing.  While Guangzhou already experimented with a proposal to charge a fee for vehicles entering the city during peak hours last August, it was met with heavy resistance from citizens who said the government has a responsibility to provide for convenient public road access, given drivers already have to pay road tolls and other taxes for road use.  Komanoff relies on economics to argue that drivers are failing to factor in the opportunity costs associated with lost time when gridlocked highways force them to spend inordinate amounts of time in their vehicles trying to get from point A to point B.  But what “willingness-to-pay” market sweet spot will convince Chinese drivers that they’d rather pay a congestion price than sit in their cars, stuck in traffic?

Komanoff has a few ideas, based on lessons learned from NYC and other cities, where congestion pricing has shown to be successful, like Singapore, London and Stockholm.  He suggests three key considerations:

  1. The effects must be visible and dramatic. To garner political backing, congestion pricing must be able to achieve at least a 15 percent increase in travel speed.
  2. The fee must align benefits with costs. New York has instituted a significant taxi surcharge of 50 cents per ride to ensure that those who take taxis rather than public transport options are also contributing to a congestion charge.  Does this mean we’ll see the disappearance of extremely cheap (compared to Western prices) taxi rides in China?
  3. Transit improvements financed by the toll revenues have to come in advance, and fare reductions guaranteed.  Again, residents need to be aware of the immediate benefits of congestion pricing.

The symposium where Komanoff presented was the first public conversation of congestion pricing in China.  Government authorities communicated the rationale and benefits of congestion pricing, bringing in experts from around the world to share their expertise and experience to the public.  This move by the Chinese government seems to suggest authorities are aware of the need for public support in such a large-scale endeavor that requires public approval in order to be successful.  In a country where an authoritarian system of government has allowed for extremely rapid, efficient implementation of policy from the top-down, forums where public conversations regarding environmental policies are not the norm.  However, such a system of governance has allowed for everything, except traffic, to move at “warp speed,” according to Komanoff.  And unless New York can also find a way to unite behind a better congestion pricing plan, he warns that “we may find ourselves being tutored in traffic relief by experts from China.”

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  • Hi again Angel —

    Let’s be clear about the distinction between “self” and “others” opportunity costs from traffic congestion.

    People are certainly smart enough to factor in their own opportunity costs in deciding whether and when to drive. But absent congestion pricing, they have no reason to factor in the opportunity costs that their decision to drive imposes on others. Critically, the latter tend to be many times larger than the former. That’s why congestion pricing is essential — to align private decisions with public costs.

    My traffic-pricing spreadsheet for New York City, the Balanced Transportation Analyzer, shows the shockingly high social delay costs — from $40 to $140 — caused by a single round-trip by car into the Manhattan Central Business District from 10-12 miles away. The analysis is in the three “Delays”-related worksheets. A different worksheet, “Breakeven,” shows, unfortunately, that only people with fairly high values of time will perceive a private benefit from faster travel with congestion pricing that exceeds the cost of the toll. Again, the gap between private and personal delay costs is pretty stark.

    More about the Guangzhou symposium some other time!

  • Hi Charles! Thanks for the clarification and great to meet you too! I guess I was looking at your argument from the other angle, but you’re right about the cost imposed on others. Do other congestion pricing schemes also factor into account self opportunity costs? It seems that there ought to be some willingness to pay studies out there that determine how much people would be willing to fork over for improved commute times.

    I’m also curious to know how the rest of the symposium went – are you blogging more about it anywhere? I also moonlight in Beijing, am interested to know whether congestion pricing is being considered there. I know after the Olympics the gov’t was quite happy to keep in place the odd-even rule, which has dramatically improved traffic there.

  • Terrific post. More than amplifies my NYT Dot Earth piece. Great links, too. Glad to meet you in cyberspace!

    One suggested correction: the problem/paradox at the heart of traffic congestion isn’t that drivers stuck in traffic fail to factor in their own opportunity costs, but that they have no reason to factor in the costs of the incremental delays that their own decision to drive imposes on others. The need to “close that loop” is the basis for congestion pricing.

    Let’s be in touch. Best, Charles

  • hello, Congestion pricing is not the system for the future. See http://trafikklogistikk.com where TrafikkLogistikk (TrafficLogistics) is described; a modern system which gives priority to service and distribution and buses.

    Knut Bøe
    Norway

  • From New York to Guangzhou: Lessons Learned from Congestion Pricing, by @ecoangelhsu http://is.gd/aImKE

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  • Check out my post: RT @TheCityFix: From NY to #Guangzhou: Lessons Learned from #Congestion Pricing http://bit.ly/ckhBLy #transport

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