1. Congestion Pricing I. Introduction II. Need and purpose of multimodal system Traffic gridlock reflects an imbalance between road supply and road demand. The reason for the imbalance is that most highways are priced incorrectly. The primary method of paying for roads is the gas tax. Unfortunately, that tax tells the motorist nothing about the relative scarcity of roadway space at certain times of day; it is just a sales tax on fuel. Once paid, the motorist perceives the cost of road access to be "free." Because other motorists have similar perceptions, they logically converge on highways at the same time. The result is traffic congestion. IV. Integration plan The solution to this problem is peak-period road pricing (also known as congestion pricing). Peak-period pricing is a road user fee that varies by the time-of-day, location, and direction of travel. The fee changes at certain times of the day because demand for road space is constantly changing. For example, at periods of high demand, we each impose delay costs on every motorist behind us. A 2:00 a.m., those delay costs are essentially zero. A rational user fee system has to reflect these variations; otherwise the motorist will not understand what the relationship is between supply and demand. This concept is not a new one to most consumers. We see it used widely in such applications as matinee movie pricing, time-of-day rates for long distance telephone calls, and off-season discounts for vacation resorts. In these and many other situations, suppliers of goods or services use fluctuating rates to help spread the demand out, thus minimizing "congestion" and eliminating the need for expensive new facilities that might only be used for short periods of time. III. Rationale for selected alternative Pricing road use provides financial signals that would encourage ridesharing, mass transit, and less driving, while improving traffic flow and reducing environmental impacts (Replogle, 1994; Cameron, 1991, 1994; BAEF, 1990). It has been estimated that pricing strategies would provide four to eight times more emissions reductions than traditional Transportation Control Measures (TCMs) (Burbank, 1995). Indeed, research in New Jersey and at UC Davis has shown that electronic toll collection can result in significant air quality benefits. (Lampe & Scott, 1995; Washington & Guensler, 1994). In terms of congestion reduction, the Metropolitan Transportation Commission (MTC) in the San Francisco Bay Area estimates that raising the Bay Bridge toll from $1 to $3 (excluding low-income drivers) during the morning rush hour would reduce traffic by 7% (Marshall, 1994). Metropolitan Transportation Commission Congestion pricing and other forms of road pricing are controversial yet potentially effective means of improving traffic flow and reducing congestion-related pollution. Such strategies use pricing (e.g.: during peak driving periods) to create incentives to change travel behavior. Many researchers strongly endorse road/congestion pricing as a potentially effective strategy to reduce SOV travel while funding alternative transportation modes. Some believe that Intelligent Transportation System (ITS) technologies such as electronic toll collection can facilitate such a strategy. This section overviews the potential environmental benefits road/congestion pricing strategies, and the potential political barriers to implementing such programs.