sure how congestion affects the cost of freight movements and how this, in turn, makes it more difficult for U.S. products to compete in world markets.

As described later in more detail, traffic congestion in and around major metropolitan areas has persisted during the past two decades despite the expenditure of billions of dollars on urban freeways and public transportation systems. Nor have various forms of recent traffic demand management techniques offered substantial relief. The lack of success with both traditional and new methods, combined with fiscal restraints and environmental restrictions on highway expansion, has renewed interest in an old idea—congestion pricing.

Congestion pricing could significantly reduce traffic congestion. Congestion pricing has a long history in the academic and professional literature and has been applied with success in Singapore since 1975. As discussed in Chapter 2 and Appendix B, it was possible to introduce congestion pricing swiftly and without controversy in Singapore in large part because the island state is not a Western-style democracy and is without the jurisdictional complexities characteristic of U. S. metropolitan regions. The pricing scheme itself is fairly simple. Drivers who wish to drive during the peak period are charged for the delays they impose on each other. When faced with a congestion fee, some drivers will decide that it is not worth it to drive (or drive alone) during the peak period. They may choose to drive at a different time, share a ride in a carpool, use transit, or make some other arrangements. Drivers willing to pay the fee will save time and the reduced congestion will reduce automobile emissions. Although congestion pricing increases out-of-pocket expenses and causes some commuters to change their behavior, society as a whole will benefit because of the resulting time savings.

Congestion pricing, however, faces a considerable political challenge. Motorists are accustomed to traveling on roads without paying tolls. Many are concerned that congestion fees would be unfair to low-income drivers or to drivers who would not like to pay the fee but would have no other choice. When raised in the United States in the past, congestion pricing proposals were summarily dismissed.

Despite its past lack of acceptance, congestion pricing is subject to renewed interest. Environmentalists increasingly see congestion pricing as a potential tool for meeting state and federal air quality standards, particularly the more stringent standards in place in California (Cameron 1991). Further impetus for congestion pricing —indeed for this study—is provided by the Intermodal Surface Transportation Efficiency Act of 1991