Congestion tax moves forward

Many complaints have been leveled against congestion pricing, the most common being that any environmental benefits the program would provide — including improved air quality and reduced carbon dioxide emissions — would not make up for the cost that consumers will be forced to bear. But what critics fail to realize is that congestion pricing, at its core, is an economic issue. The time that drivers spend stuck in traffic is time that could be used making money. According to a December 2006 report by Bruce Schaller of Schaller Consulting, the total value of time wasted by NYC traffic congestion comes to about $8 billion annually. While that number reflects a larger area than that covered by the proposed congestion-pricing plan, the message is still clear. Furthermore, the waste caused by traffic congestion can also be felt in the impact that unpredictable travel times and smog-filled streets have on the price and appeal of doing business in heavily congested areas of the city.

Some critics erroneously view congestion pricing as yet another expensive environmental protection program that would operate at the expense of economic productivity. But the success of the plan reflects the fact that many business and political leaders, like Bloomberg, finally realize that environmental sustainability and economic efficiency go hand in hand.

In the 1960s, the environment was an aesthetic issue: polluted rivers were ugly and smelly and we wanted someone to clean up the mess. In the 1970s and 1980s, the environment became a health issue as we learned that the toxic substances in the ground, air, and water could make us sick or kill us. In the 1990s, the environment became an issue of global survival as we learned that our air conditioners and refrigerators were poking holes in the ozone layer and that the carbon dioxide emitted from our cars and power plants was heating up the planet’s atmosphere. All of that was important enough to capture the attention of many Americans, but it didn’t seem to bother the people who ran America’s businesses and cities.

The success of congestion pricing represents a wide-ranging shift in the way our leaders think about environmental policy. They have finally realized what experts in the field have known for years: environmental protection and economic efficiency are two sides of the same coin. Bloomberg himself is an excellent example of this turnaround. In his first term, he dismantled key elements of the city’s recycling program, opposed hybrid taxicabs, and opposed congestion pricing. In the last year, the data on the economics of going green persuaded him to make environmental sustainability one of his top priorities.

New York City’s congestion-pricing plan is the surest sign to date that sophisticated, data-driven managers are beginning to understand that clean air, clean water, and energy efficiency are not luxuries, but essential attributes of a well-run company or community. Throughout the city, things are beginning to change. More green buildings, like the new Bank of America Tower on Sixth Avenue, are being built. While efficient "green materials" were once thought to be prohibitively expensive, the lower energy costs and higher worker productivity in these buildings are allowing landlords to actually make money off of going green. Bloomberg has also proposed other changes that efficiently blend environmental and economic policy. In New York City’s subway system, fluorescent lamps are replacing incandescent lamps and NYC Transit will soon save $4.8 million per year in the cost of lighting. Recently, Bloomberg announced that NYC’s cab fleet is going hybrid, a move that will save millions in fuel costs.

The success of congestion pricing is a sign that something is beginning to change in the way politicians and businesspeople think about the environment. They are beginning to see that pollution is waste, waste is an indicator of inefficiency, and inefficiency is the enemy of profit. Environmental protection is a way to reduce the cost of energy, water, sewage, waste disposal, and health care, and it’s a tool for attracting highly mobile global businesses. Congestion pricing is hopefully only the first step toward a greater emphasis on environmental and economic sustainability throughout the country, and Bloomberg should be lauded for setting America’s largest city on the path toward a cleaner and more efficient future.

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