GE541 Economic Geography of Transport October 30th

Congestion Pricing: Theory and Practice Congestion Price Charging a substantial fee for vehicle operation at times and places subject to peak demand Monetary incentives toward behavior modification

Recent policy interest in pricing policies such as road tolls and parking fees Focus on limiting traffic congestion

Road Pricing Examples 1.Singapore (1975) 2.Bergen, Oslo, Trondheim, Norway (circa 1990) 3.Auto Route A1 (France) 4.California 91 (1995) 5.London 6.Seoul, Korea

Singapore Area Licensing Scheme (1975) A.Fee of US $ /day (exempting car pools & taxies, motorcycles & commercial trucks). B.Above vehicles no longer exempt C.Afternoon peaks included Car commuting (<4 riders) dropped 48% - 27% Carpool & bus increased 41% - 62% More Recent Electronic System Stringent Policies

Hong Kong and Cambridge, UK Trials and Non Adoption

Scandinavian Toll Rings Objectives: Revenue Generation rather than Congestion Pricing Both in Norway and Sweden The latter may evolve into a congestion pricing

Stockholm Dennis Package Improved public transit New bypass roads and Road pricing [A toll ring - 15 year investment package] North-South bypass route west of the city

Auto Route A1 N. France Weekend Peak Spreading April 1992 Red Tariff - Sunday 4:30 - 8:30 pm Toll rates % higher than normal toll Open Tariff (lower toll rates) –before and after peak hours

Riverside Freeway (California) (CA-I-91) Private French toll road firm (Toll approximately $2.00) Dulles Highway Tolls

Netherlands Randstand Region 2,000 square miles 6 million people Road Pricing Scheme Plan

Greater London £5 Charge in Central London A Success Story

Seoul Case

New York City Plan

The Politics of Road Pricing The Anglo Saxon Experience

US Government tried tolls on publicly owned and operated roads and bridges No cities bought the idea [Distinction between road and home use pricing] ISTEA experiments in congestion pricing More interest in tolling growing, however, in controlling air pollution

(especially in inner portions of metro areas) - in these cases, new construction almost impossible Tolls in such situations can induce motorists to consider: Demand Management Role of Tolling  alternative routes  alternative modes and  alternative travel times

1990 Clean Air Act All reductions of air pollution came initially from technologies Further reduction must come from behavioral changes Auto air pollution comes from Cold engine starts VMT No discouragement of auto use in off-peak periods Interest in ubiquitous tolling for environmental planners

Winners and Losers Economists - focus on CBA Gains to winners a must > Costs to losers so that society as a whole is better off.

Planners and engineers sensitive to the fact that such compensation seldom takes place, so that some parties are left worse off by tolling than before.

Tolling on Existing Road WinnersLosers 1. High value on travel time savings 1. People with low value of time 2. HOV lane users2. People shifting to a competing untolled facility 3. Recipients of toll revenues 3. Users of the above competing facility 4. People who decide not to make this trip Political support for tolling difficult to put together. Compensation packages?

Tolling a New Road Less losers More acceptable than tolling existing one (e.g. taking away an existing lane for a tolled HOV lane not popular)

Federal Gas Tax 4 cents/gallon 1950s 9 cents cents /2 cents1993 Gas tax weakens the case for imposing tolls