Congestion Charge is a flat rate charge levied by Greater London on each vehicle entering London begining in 2003. Brainchild of London Mayor Ken Livingstone the fees are designed to reduce both the intense traffic congestion of central London and the resulting air pollution from emissions that degrade the quality of life in one of the planet's most interesting cities.

On November 2006, Livingston announced that the congestion charge program would be used to discourage use of environmentally harmful sport utility vehicles (SUVs) or "Chelsea Tractors" owners by imposing fees of £25 or U.S. $47 each time they enter the Cemtral London during peak travel periods beginning in 2009. Also affected are sports cars like the Porsche 911 and luxury cars like the Roll-Royce Phantom, Jaguar X-Type and BMW 335i.

In addition to London, Singapore and Stockholm have also levied a congestion fee. However on July 17, 2007 the New York state legislature failed to adopt a similar fee for New York City. The proposed law would have levied an US$8.00 toll for cars and a US$21.00 toll for trucks entering the most heavily traveled business district of Manhattan during workdays. According to the proposal's chief sponsor, Mayor Michael Bllomberg, "New York City is today poorer because of Albany's inaction yesterday, and I think sadly it appears that we jeopardized, at best, and probably lost, a once-in-a-lifetime opportunity. And demonstrated once again that Albany just does not seem to get it."

Congestion charges/fees are Pigouvian taxes on externalities, required becauase people a less sensitive to the value of time than money. They also represent one of the tools in the kit that could help reorganize automobile transportation in the future.


  • "London Congestion Tax Used to Punish SUVs, Sports Car Owners." The November 11, 2006.
  • Wilkliam J. Mitchell, et al., 2010. Reinventing the Automobile. Cambridge, MA: The MIT Press. Pp. 134-136.
  • "NYC Traffic Proposal Is All but Dead." Associated Press July 17, 2007.
  • Tom Vanderbilt. 2008. Traffic: Why We Drive the Way We Do (And What it Says About Us). New York: Vintage Books. p. 165.


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