Congestion Pricing. Has It Worked and Can It Fix New York?

The handful of cities around the globe that charge motorists a premium to drive in congested areas at peak times have seen traffic go down and revenue go up. New York City’s need for both has become a crisis. The Metropolitan Transportation Authority faces near-rebellion from riders and a $40 billion estimate to repair or improve its trains, subways, buses, bridges and tunnels. To raise the cash, New York Governor Andrew Cuomo won passage of a congestion-pricing plan that will tax access to Manhattan’s priciest parts to encourage people to get around underground. Critics of the plan see it as a new round of tolls rather than a program that’s innovative and eco-friendly.

Economists call it a demand-side solution. Jack up the price for almost anything and demand will fall -- meaning clearer streets and cleaner air. Raising the price to create a revenue stream makes things a little tricky, though. Charge drivers too little, and you’ll make money but still have jams. Charge too much, and you risk turning off too many drivers -- great if you’re going for bike- and pedestrian-friendly, not so hot if you really need the cash, too.