NEW YORK, NEW YORK – MARCH 6: New York Governor Kathy Hochul speaks during a press conference to … [+] announce new subway safety measures at NYCTA Rail Control Center on March 6, 2024 in New York City. (Photo by Adam Gray/Getty Images)
New York’s Governor Kathy Hochul has “indefinitely paused” congestion pricing in Manhattan. The climate community is outraged by this last-minute reversal. Might there be more to this story? For example, could this reversal be justified if it helps Democrats win the House in the 2024 elections, and eventually support a more aggressive federal-level climate policy?
Transportation is a major source of local air pollution and global carbon emissions. To address these twin issues, people should drive less and take public transit, bike, or walk instead. Governments can support these objectives with demand-side and supply-side measures. On the demand side, they could impose gasoline taxes and enact user charges such as tolls or congestion pricing. On the supply side, they could invest in credible alternatives to cars such as mass transit.
New York sought to use congestion pricing to support mass transit and disincentivize car use. Along with reducing local air pollution, this supported its net zero goals because transportation is among the largest sources of greenhouse gas emissions in New York state. Under this policy, vehicles entering Manhattan’s Central District (the area south of 60th Street) during peak hours would have been charged a fee: $15 for passenger vehicles, $24 for small trucks, $36 for large trucks, $12.50 for cabs, and $2.50 for ride-shares. The annual toll revenue of $1 billion would have allowed New York’s Metropolitan Transportation Authority (MTA) to secure $15 billion in bond financing for train lines, signaling systems, and electric buses. The hope was that New York City would emerge as a role model for other American cities on how to support mass transit by taxing car use.
But Why Pause It Now?
It is politically difficult to enact policies that benefit everyone but impose costs on specific communities and sectors. This is why European farmers are angry at climate policies and the Brussels establishment that enacted them. French President Emmanuel Macron wants a “regulatory pause” in climate laws. The Canadian government has temporarily halted the home heating oil levy in Atlantic Canada. About one-fourth of U.S. counties restrict renewable energy facilities which local residents view as spoiling rural landscapes. The National Congress of American Indians wants a moratorium on offshore wind. Arguably, New York’s congestion pricing saga reflects the growing opposition to climate policies.
But backlash stories have been in the news for a while. So, why pause congestion pricing a few weeks before its launch on June 30? After all, in anticipation of this new revenue, the MTA had already invested about $500 million in tolling cameras. While an April opinion poll revealed that New Yorkers opposed congestion pricing by a 64-33 margin, Governor Hochul forcefully defended it in May at the Global Economic Summit in Ireland. She noted: “Walk around many major cities and it won’t take long to encounter frustrated drivers caught in traffic jams, cars spewing exhaust on overpacked streets. We determined that the average New York City driver spends 102 hours a year stuck in traffic. Those hours add up to more than four days of your life – every year… Starting next month, New York City will become the first city in the U.S. to implement congestion pricing… London, Milan, Stockholm, and Singapore have all implemented similar plans with great success. In New York City, the idea stalled for 60 years until we got it done earlier this year.”
Given the active advocacy at home and abroad, nobody saw the policy reversal coming. Governor Hochul suggests that she paused the policy after a chat with some diner owners, which made her realize that new tolling costs would hamper New York City’s recovery from the pandemic. But it is difficult to believe that the Governor was unaware of these issues before her Ireland trip, especially because she is a big fan of diners.
Enter Federal Politics
If the diner story doesn’t wash, what might explain the timing of the indefinite pause in the first week of June? By some accounts, Governor Hochul visited the White House just before announcing the policy pause. Given that inflation is Biden’s “most stubborn” political problem, congestion pricing might have enhanced the perception that Democrats are ignoring pocket-book issues affecting the working class and middle class when enacting climate policies.
But given that New York is a solid blue state in Presidential politics, it is likely that the White House visit was focused on Congressional politics rather than Presidential elections. Democrats lost the House in 2022, in part, because Republicans flipped four New York Congressional seats. These districts are in suburbia where congestion pricing is deeply unpopular. Because Democrats want to retake the House in November 2024, they need to win these seats. Not surprisingly, House Minority Leader (and the Speaker-in-waiting), Hakeem Jeffries, supports Governor Hochul’s decision to pause congestion pricing.
To conclude, congestion pricing is an excellent idea from the public health and climate perspectives, as revealed in London, Stockholm, and Singapore. However, political stars need to be aligned even for enacting good policies. Congestion pricing probably fell victim to the changing political conditions. It was a sacrifice Democrats had to make to increase the chances of their victory in the November 2024 House elections. After all, in a game of political chess, the pawn (congestion pricing) might be sacrificed to save the queen (House majority).
This saga has a broader policy lesson. Communities oppose policies that impose costs on them but create benefits for everyone. These include farmers protesting higher diesel prices, coal miners opposing new regulations, rural residents seeking local ordinances against renewable energy projects, and citizens punishing politicians for rising energy costs. These policy objectors are not climate deniers. Rather, they view themselves as victims of elite policy making which unfairly burdens them with climate transition costs. The implication is that governments seeking climate progress should listen to cost-burdened communities and enact measures to address their concerns. This might require climate advocates to revisit their theory of change to identify the real drivers of opposition to climate progress.
