Congestion Pricing = Green Technology = more jobs & less outsourcing

The New York Times
July 15, 2007
Op-Ed Columnist
The Green Road Less Traveled
By THOMAS L. FRIEDMAN

Whoever knew — I.B.M. is managing traffic congestion in Stockholm. Well it is, and therein lies a story.

Probably the biggest green initiative coming down the road these days, literally, is congestion pricing — charging people for the right to drive into a downtown area. It is already proving to be the most effective short-term way to clean up polluted city air, promote energy efficiency and create more livable urban centers, while also providing mayors with unexpected new revenue.

Imagine a day when you will go online and buy a pass to drive into any major urban area and the price of your pass will be set by whether you are driving a hybrid or a Hummer, the time of day you want to drive, the road you want to use and how much carbon your car trip will emit. And if there is an accident on the route you normally take, an alert will be sent to a device in your car warning you to go a different way.

Well, that day is pretty much here for London, Stockholm and Singapore — and New York City could be next. In a few years, the notion that you will be able to get into your car in the suburbs and drive downtown for free will be as old-fashioned as horses and buggies.

But what does this have to do with I.B.M.? To make congestion pricing work, you need technology — cameras, software and algorithms that can read auto license plates as they flash by and automatically charge the driver or check whether he or she has paid the fee to enter the city center. (The data is regularly destroyed to protect privacy.) That is what I.B.M. is providing for the city of Stockholm, which, after a successful seven-month trial in which traffic dropped more than 20 percent, will move to full congestion pricing in August.

“In Stockholm, we built a system where we have a ring of cameras around the city — 18 entry points with multiple lanes,” explained Jamie Houghton, I.B.M.’s global leader for road charging, based in London. “I.B.M. Stockholm runs the whole system.”

O.K., Friedman, so I.B.M. is now in the traffic biz. Who cares?

I care, because it underscores a fundamental truth about green technology: you can’t make a product greener, whether it’s a car, a refrigerator or a traffic system, without making it smarter — smarter materials, smarter software or smarter design.

What can many U.S. companies still manufacture? They can manufacture things that are smart — that have a lot of knowledge content in them, like a congestion pricing network for a whole city. What do many Chinese companies manufacturer? They manufacture things that can be made with a lot of cheap labor, like the rubber tires on your car. Which jobs are most easily outsourced? The ones vulnerable to cheap labor. Which jobs are hardest to outsource? Those that require a lot of knowledge.

So what does all this mean? It means that to the extent that we make “green” standards part of everything we design and manufacture, we create “green collar” jobs that are much more difficult to outsource. I.B.M. and other tech companies are discovering a mother lode of potential new business for their high-wage engineers and programmers thanks to the fact that mayors all over the world are thinking about going green through congestion pricing systems.

“Congestion pricing of traffic is emerging as a completely new services market for I.B.M.,” said Mr. Houghton. “I.B.M. is in discussion with major cities worldwide, including some in China.”

Hopefully, if the New York State Legislature acts, New York City will get access to a $500 million Department of Transportation grant for a pilot congestion pricing system. The more U.S. cities adopt congestion pricing, the more U.S. companies will quickly develop the expertise in this field, which is going to be a huge growth industry on a planet where more and more people will be living in cities. Congestion pricing is the only way to make them livable without trillions of dollars of new infrastructure.

As New York Mayor Michael Bloomberg, who’s trying to bring this system to his city, put it to me: “The percentage of your working day spent in a commute will go down and the time you spend being productive and being paid, or simply relaxing, will go up. Also, more people will do business in the city, because they can get to stores, offices or the theater more easily.”

So if you hear a politician say that we can’t afford to impose green standards because it will cost us jobs, tell them: “Hogwash.” The more we elevate, expand and globalize green, clean-power standards the more we play to the strengths of the American economy, American jobs and American-based companies.