CEDA Chief Executive Professor the Hon. Stephen Martin said Western Australia's economic success was generating significant population growth, increasing pressure on transport infrastructure.
"This population growth will need to continue if WA is to avoid predicted labour shortages, which means consequences of that growth, such as congestion, need to be managed now," he said.
"This paper Stifling Success: Congestion charges and infrastructure delivery, aims to generate debate on options for addressing congestion in Perth now, before the issue becomes too costly for residents and business."
Paper author, CEDA Chief Economist Nathan Taylor said the cost of congestion to Perth is forecast to rise from $900 million in 2005 to $2.1 billion by 2020.
"WA is booming and that is set to continue with over $280 billion in business investment planned for the state. The unfortunate side-effect of this economic, and the related population growth, is congestion," he said.
"In other Australian cities, increases in congestion have resulted in less community acceptance of continuing growth.
"However, if Perth addresses this issue now it can tackle this social issue before it becomes to detrimental to business and the community.
"Explicit entry points around Perth such as Narrows Bridge, the Swan River and the Mitchell Freeway provide natural boundaries to create a ring around Perth CBD, to define a congestion charge area during peak times.
"Increased parking, rail and bus options could then be provided at these entry points, providing commuters with options to avoid congestion charges.
"This would incentivise those that can change their behaviour to do so and would also mean that infrastructure isn't built simply to manage the peak, only to be left under-utilised for the majority of the day."
However, he said if congestion charging was to be considered, it would be vital that it was not seen as a revenue raising exercise and charges were invested in maintaining and improving transport infrastructure.
Mr Taylor said while congestion charges are often unpopular when proposed, the experience in other jurisdictions is that once implemented they become more broadly accepted.