Both targeted and comprehensive pricing/tolling potentially reduce congestion by promoting more efficient use of existing facilities. This in turn produces one of the most important potential benefits of pricing: a reduced need for future highway capacity expansion.
A few recent international studies and domestic analyses demonstrate that road pricing, through its ability to reduce congestion, could decrease the need for capacity expansion to handle peak hour traffic. A European Union report estimates that road pricing could lead to savings from a reduced need for construction of 30 billion to 80 billion euros per year in the European Union as a whole.43 A U.K. study estimated that universal road pricing in that country would reduce the need for new road capacity by 80 percent.44 The U.S. DOT estimates that implementing comprehensive congestion pricing on all congested facilities in the United States (both on and off the federal-aid highway system) would reduce highway capital spending needs by $38 Pillion, from $89 Pillion per year to $51 Pillion.45
These cases are based on both a scope of congestion pricing implementation (that is, at all levels of government and in all parts of the country) and distance charges that may not be practical or realistic (at least in the near to medium term, and generally not in rural areas). And the European study reflects different transportation systems, cultures, and travel habits that may not be directly applicable to the United States. Taken in combination, however, the findings do show that pricing could reduce the need for highway investment.
The implementation of either more targeted tolling/pricing initiatives or comprehensive pricing could also improve the setting of priorities for capital investment decisions in the future. Currently, transportation planners predict future capacity needs by extrapolating trends related to travel, land use, demographics, economic development, and other relevant considerations. With pricing, the willingness of users to pay (or not to pay) to travel certain routes, including their willingness to pay higher prices during congested periods, helps provide additional signals about where more capacity is needed, similar to the signals that prices provide for the demand of other goods and services in the economy.