Location Dynamics: a Key Consideration for Urban Policy

www.philadelphiafed.org take, for example, London’s decision in 2003 to implement a new plan to reduce congestion in the center of the city. At the time, development was booming and traffic congestion was becoming increasingly troublesome. Rather than try to increase capacity through construction of more highways and other automobile infrastructure, London introduced a congestion pricing policy. the idea of congestion pricing is simple and has wide support from economists and policy analysts. Because congestion has many negative social effects, including slower travel times, increased carbon emissions, and reduced local air quality, a tax on congestion can have net positive effects for society by encouraging people to travel by other modes or at different times. London initially levied a charge of £5 on any car travelling into central London, with the price increasBy JeFFRey BRInKmAn