Per-capita levels of driving are rising everywhere, increasing peak-hour traffic congestion. And transit use -- as a percentage of all trips -- continues to decline. However, there is a solution that can be implemented quickly, on existing roadways, with no public subsidies, says a Cascade Policy Institute study.

The solution is peak-hour electronic pricing of regional commuter highways, combined with deregulation and privatization of the transit industry.

Congestion pricing is a road user fee that varies by the time-of-day, location and direction of travel. The fee is collected electronically through transponders placed on the vehicles.

• Electronic tolling (with flat rates) is being used on the Oklahoma Turnpike, the Dallas North Tollway and on many bridges in the New York City region.

• Peak-hour pricing is being used on a new tollway in Orange County, Calif., where the tollway's operator -- a private company -- guarantees a congestion-free trip and sets the fee at whatever level is necessary to maintain a smooth traffic flow.

• Currently, the peak-period fare on that tollway is $2.95 for an 11-mile trip, while the off-peak price is only $.060.

Congestion pricing allocates a scarce commodity -- road space -- according to consumer demand. A fluctuating road user fee gives users an incentive to carpool, use transit, vary work hours or make some other behavioral change.

The study concludes that congestion pricing and competitive, free-enterprise transportation are ideal complements.