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The economics of congestion charging Congestion is a classic example of the overuse of a common resource - in this case, the London road network - to which there is free access. Unless traffic flow is light, each additional road user slows down other drivers but does not perceive this as a cost since it is not included in his or her own journey costs. This tends to lead to overuse compared with the situation in which motorists do face this cost. This is not a new theory, and neither is the idea of road pricing. Road pricing in Britain was first suggested in the early 1960s, after new vehicle registrations more than doubled between 1958 and 1963. The Smeed Report, published in 1964, suggested that drivers should be charged for the delays they imposed on each other.6 Figure 2.1 illustrates the total private costs to motorists when a certain number of trips per hour are made on a given road. This includes time costs, petrol costs and so on. These total costs rise more...

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