Fiscal Instruments for Low Carbon Transport in Chennai

This study examines the feasibility of implementing a congestion tax in Chennai, Tamil Nadu to present recommendations regarding levying a per trip charge in heavily congested corridors in the city.

Chennai ranks one of the highest among all South Asian cities in terms of GHG emissions as well emissions of other criteria pollutants, especially NOx and PM10. The city also suffers from heavy volumes of traffic and congestion, particularly on the arterial roads. Several proposals have been discussed by the Chennai Corporation, in the recent past, to tackle these twin problems of congestion and pollution. Some of the options that are being considered include congestion tax, electronic road pricing, and ramp metering. This study represents an attempt to analyse one such option by quantifying the costs of congestion for the city of Chennai and making recommendations regarding levying a per trip charge in heavily congested corridors of the city.
This paper utilises secondary data to calculate the time cost, fuel cost and cost of emissions due to congestion and makes recommendations regarding the effective design and application of such a tax. Data for this study has been taken primarily from the Chennai comprehensive study on transport (CCTS, 2010).
Key Findings
The major source of pollution from vehicles is in the form of suspended particulate matter and black smoke which penetrate in the lungs and cause health problems. Congestion if not addressed would impede the growth of the city. Direct results of this project also indicate adverse effects on individuals and their families as the amount of 1) time and 2) fuel that they spend increases due to congestion.


The study suggests that investing in creating more transport related infrastructure may not address the problem of congestion.  Along with other infrastructural investments, it is important to change the behaviour of the individuals. As individuals are unlikely to change their behaviour on their own, some congestion pricing would motivate both people and businesses to make informed decisions and reduce carbon emissions by acting in self-interest of saving time and money spent on excess fuel.

Thematic area


Project Leads

Haripriya Gundimeda, Koyel Mandal


Tamil Nadu


ClimateWorks Foundation