Case Study: Congestion Pricing in Stockholm

January 17, 2022

Stockholm, Sweden’s capital – first trialed congestion pricing back in2006 with great success. Today, Stockholm’s congestion charge zone is still in effect, with the city enjoying lasting benefits.


With New York City congestion pricing just around the corner, what exactly are these benefits? And what can be learned from the success of Stockholm?


Congestion Pricing Tax in Stockholm


In the mid-2000s, more than half a million cars were entering and leaving the center of Stockholm every day, causing gridlocked streets and traffic pollution.


In 2006, the city ran a pilot program on its population of 1.8 million people.


Every vehicle that entered the city between 6.30 am and 6.30 pm was charged a congestion fee equivalent to $3 USD.


This fee was a highly debated topic in Sweden, and it consistently made headlines. Most Swedes, around 60 to 70%, were strongly opposed to the congestion pricing program.


Similarly, many citizens of New York are understandably feeling the same way right now about congestion pricing in Manhattan. But as you will see, some benefits could arise from a NYC congestion pricing plan.


The Outcomes of the Congestion Pricing Trial


The trial outcome surprised many of Stockholm’s citizens. Public confidence grew as traffic congestion eased.


Traffic levels were reduced by about 25%. Buses and taxis were moving much faster and were arriving on-time more often. People noticed a significant improvement in noise and air quality.


Once the 7-month trial was over, the Swedish government held a referendum in September 2006. Many citizens did a complete U-turn. Many of those who initially opposed the congestion pricing plan now voted in favor of it.


Full Implementation of the Congestion Pricing Program


In 2007, Stockholm implemented its congestion tax permanently.


Today, the cordon congestion scheme uses automatic number plate recognition to capture the license plates of any vehicle entering and exiting the affected area.


The pricing is variable based on the time of day – with the highest charge equivalent to $4.14 USD. (Note –this is much lower than the proposed congestion charge for NYC – but we will touch on why this may be shortly).


The same rules apply as they did to the trial, with users charged between 6.30 am and 6.30 pm on weekdays. There are no charges at night, onweekends, on public holidays, or the day before public holidays.


The Benefits


Some of the benefits Stockholm has experienced from its congestion pricing plan include:

-       Stabilized traffic reduction of approximately 20%

-       Decrease in traffic delays by 30 to 50% - resulting in less stress

-       16 additional bus routes and 197 new buses

-       A 14% reduction in carbon dioxide emissions (allowing environmental goals to be met)

-       Improved emergency response vehicle times

-       Improved air quality – statistical modeling has shown that the congestion pricing program has resulted in 20-25 fewer premature deaths per year in Stockholm’s inner city.

-       2800 new regional park and ride spaces


The communication of these benefits has been crucial in the program's success (hopefully, New York City does the same).


Where Does the Money Go?


The initial investment for Stockholm’s congestion pricing program came at the cost of 2 billion krona (236.7 million USD).

This was recouped after just four years of the program’s implementation, with the government netting around 1.3 billion krona (155 million USD) each year.

Revenue raised from congestion taxes is funneled back into Stockholm infrastructure. Similar to the plan for NYC – Stockholm also uses the funds to finance the maintenance of public transit improvements.

Not only is it important for the government to communicate the benefits of eased congestion and reduced CO2, but citizens also want to know where their money goes.

What Can New York City Learn from Stockholm?


As you may be aware, plans are currently in place to charge a congestion fee for anyone entering Manhattan CBD south of 60th street.


Anyone that enters this transit-rich area of the city will be charged acongestion fee of anywhere between $9 to $23.


The planned NYC congestion fee is significantly more than what is charged in Stockholm. This is likely because New York City’s construction costs are currently the highest in the developed world. With revenue from this program invested into New York City public transport, it makes sense that the congestion fees will be higher in NYC than in Stockholm.


As you can see – there are many benefits to be realized from NYC’s proposed congestion pricing plan - as long as it is carried out effectively.


New York can learn many things from Stockholm. For example, Stockholm expanded its bicycle infrastructure and bus routes before and during its congestion pricing program.


New York City needs to take a close look at its transport system as a whole and evaluate the alternatives for anyone who currently enters Manhattan by private vehicle.