Traffic Congestion as Market Failure

... car. The problem of congestion lies in busy cities, town centres and the surrounding roads. The discouraging of people to make the additional journey could ease the problem of congestion by car, especially the short journeys of in and around the town or city. The negative externalities produced by cars are worsened when the car is in traffic, not when driving at a normal motorway speed. As the main problem of car use is caused by slow moving traffic in built up areas, it would be wise to address that as the problem and attempt to combat it. Road pricing would basically involve the charging of motorists to use the roads in and around the congested urban areas. It is hoped that by charging motorists to use the road space, they would make alternative arrangements to travel; walk, cycle, share a car or use public modes of transport such as buses. The reduction of cars on the road would inevitably lead to a reduction in congestion and therefore the problems it causes. Road pricing can be done in a number of ways, and technology advances have allowed these ways to be varied and efficient. In Oslo road pricing was introduced by placing a toll ring around the city centre, 19 toll stations were placed in Oslo located on every access road to the city centre. 8 of the toll stations are on main roads and the remaining 11 are on minor roads. The stations have lanes for conventional payment to gain access to the road, they also have lanes for electronic payment, done through a chip placed in the ...