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What is a Congestion Charge?

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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 01 September 2016
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    2003-2016
    Conjecture Corporation
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Congestion charges are fees that are imposed during peak periods of travel along a transportation network, such as a highway system or a section of city streets in a business district. A limited number of cities and towns around the world have implemented congestion charging as a way of helping to minimize the amount of traffic congestion within a specified area during peak traffic periods. There are several different approaches to charging this type of fee, as well as defining the area in which the fees apply.

Currently, there are a couple of slightly different approaches to defining the section of a city or town where the congestion charge will be assessed. One strategy is to establish specific entry and exit points into the area, effectively creating a cordon around the area. With this model, the congestion charge is paid each time a vehicle enters the cordon. In some cities, the fee is based on the number of occupants in the vehicle, while others simply impose a flat fee.

Another approach to defining the area where the charge will apply involves setting up tollbooths at the points of entry and exit, as well as key points within the defined area. This approach not only helps to minimize unnecessary traffic into the area, but also limits movement within the area as well. Charging a fee to leave the area acts as an additional deterrent to entering the zone during peak traffic periods.

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Paying congestion charge fees is typically accomplished by presenting cash to attendants at the points of entry or exit. Several cities around the world have also made it possible to pay the charges ahead of time, via credit or debit card. When this is the case, the individual can print out a voucher that is presented at the entry points, proving that he or she has already paid for privilege of being in the area for that day. A few places are also experimenting with accepting credit and debit cards at kiosks within the defined area.

There are a couple of benefits associated with imposing a congestion charge. One has to do with the generation of revenue. The funds collected are often earmarked to help maintain the streets and main thoroughfares within the restricted area. This helps to ease the burden on city budgets, and allows funds collected through taxes and other measures to be directed at other pressing needs in the community.

Another benefit to the congestion charge has to do with easing the amount of traffic in city centers and similar busy areas. The measure tends to encourage carpooling or the use of public transportation, which in turn helps to reduce the number of vehicles on the streets during peak traffic periods. Along with making it easier to travel through the area, fewer vehicles means a lower level emissions into the atmosphere, which is good for the environment.

Not everyone is in favor of the congestion charge. People who oppose the charge believe that the measure is not good for retailers and others in the defined zone who rely on plenty of traffic to earn a profit. There is also some concern that the measure simply makes the areas surrounding the defined zone absorb more traffic, effectively spreading the problem over a larger area rather than minimizing the issue.

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