China Willing to Pay Up to Make Traffic Flow

Most drivers are willing to accept congestion charges, unlike Europeans and Americans.

Singapore uses Electronic Road Pricing (ERP) gantry system to alleviate traffic congestion and regulated traffic flow at different locations in Singapore. Gantry entry pricing varies accordingly to location and timing. Savings could be made for commuters or motorists by entering restricted zone or gantry zone at off peak hours or non-operating hours of ERP system Singapore's Electronic Road Pricing system.

The overwhelming majority of people in China are willing to pay yearly congestion fees to reduce traffic, according to a new Oliver Wyman Forum survey. That stands in stark contrast to opinion in Europe and the United States, where more than half are unwilling to pay.

Although China has no congestion pricing legislation yet, high willingness may reflect having some of the most congested cities in the world. Our survey also finds that Chinese consumers are almost unanimous in their willingness to let companies’ climate change commitments influence where they spend money.

What started decades ago as a measure to reduce congestion in cities like Singapore and London is fast becoming a popular vehicle for combatting climate change – particularly as transportation accounts for nearly a quarter of global CO2 emissions. Authorities in Vancouver, for example, view it as a climate-change measure first and a revenue driver second. “We are using the same pricing concept [as London, Stockholm, and Singapore] but it’s not the same goal,” Dale Bracewell, Vancouver’s manager of transportation planning, told the Oliver Wyman Forum. “Climate change is driving our initiative.”

While more than half of people surveyed in the UK and Italy say they are unwilling to pay, both London and Milan have congestion systems that are reducing emissions. London noted a 12 percent reduction in vehicle emissions within a year of the fee introduction while Milan saw a 33 percent drop in soot from vehicle exhausts. The fees have raised millions in both cities for new buses, bikes, and other transit options.

Unwillingness outside of China may look dour to congestion pricing advocates, but the tide may be turning. Younger generations in the six Western countries surveyed are relatively supportive of congestion fees, with more than half expressing willingness to pay fees. This age trend is applicable to all countries: The support for paying fees decreases with age, with the under-25 cohort twice and sometimes three times more likely to support congestion fees than those 75 or older. 

Some experts say that the coronavirus pandemic offers cities the chance to implement congestion charges as many rethink their streets to keep traffic low in anticipation of a potential rebound in car sales this year. With cities looking for both eco-friendly measures and revenue avenues in their COVID-19 recovery, congestion pricing may increasingly get a green light.