The Italian city of Milan has imposed a charge of up to 10 euros (£7.50) on vehicles entering the city.
Money raised will go towards buses, cycle paths and green vehicles
The "eco-pass" is being policed by cameras at 43 electric gates around an 8-sq-km (three-square-mile) inner area.
The mayor of Milan, Letizia Moratti, launched the charge predicting a 30% cut in pollution levels and a 10% reduction in traffic.
Electric and hybrid cars are allowed to enter the congestion charge zone without payment.
There have been teething problems with the launch of the congestion scheme, particularly with its website, but Ms Moratti was undeterred.
"The things that help improve our standard of living cannot be sorted out overnight," she said.
On weekdays, between 0730 and 1930, drivers will have to buy a ticket either online or from key points in the city.
The price of the ticket depends on the vehicle involved and anyone who fails to pay the charge will face a fine of at least 70 euros (£52).
Money raised will go towards buses, cycle paths and green vehicles.
The BBC's Christian Fraser says polls show the city is evenly divided on the idea behind the charge.
In a country considered to have one of the highest rates of car ownership in the world, Milan itself is reputedly one of Europe's most polluted cities.
An estimated 89,000 vehicles take to the city's streets every day but city officials say traffic on the first day of the scheme was 40% lower than normal.
The man in charge of the eco-pass, Edoardo Croci, said he could not have imagined a better start.
"Everything was quiet," he said. "We did not have the emergency our critics had imagined."
Mr Croci said that the majority of the private cars entering the zone on Wednesday were exempt from the charge because they had been fitted with anti-smog filters.
The real test of the scheme will not come until next week when children return to school and businesses fully re-open after the Christmas and New Year break.
Two other northern cities in Italy, Turin and Genoa, are also considering a pollution fee.
In 2003, a congestion charge was introduced in London, reducing traffic levels in the area and cutting carbon dioxide emissions by almost a fifth.