Monday, 28 April 2014

Congestion Pricing: Are We Ready Yet?

Okay folks, we're going to move into a subject that is a little bit more humdrum but one that still needs to be on the table.  I want to move into the realm of transportation planning and talk about congestion pricing, also referred to as 'fair tolling'.   Congestion pricing is a municipal policy that charges a fee for vehicles, in an attempt to reduce traffic congestion and air pollution and generate revenue needed to support urban transportation infrastructure.  It is meant to encourage users who can be flexible in their usage times to shift their use away from peak periods to times when use is less expensive.

Introduced in Singapore in 1975 and fully implemented in London in 2005, the application on urban roads is currently limited to a small number of cities as well as a few smaller towns throughout the world. That should tell you something; while it seems like a great idea, it's not easy to adopt and implement the policy necessary to take congestion pricing from concept to reality.

Four general types of systems are in use; a cordon area around a city center, with charges for passing the cordon line; area wide congestion pricing, which charges for being inside an area; a city center toll ring, with toll collection surrounding the city; and corridor or single facility congestion pricing, where access to a lane or a facility is priced.

Congestion pricing is complex and not widely understood or accepted by the broader community and yet transportation experts have been singing its accolades for 50 years or more.  There is significant financial investment required to precede implementation, and concerns about the necessary capacity for monitoring and evaluation have all hindered the adoption of congestion pricing in cities that have explored it. One of the major criticisms is that it acts like a regressive tax, harming low-income users more than other groups. This contention fails to consider how much low-income residents already pay for transportation in taxes/fees and how much residents would pay for highway infrastructure under an alternative revenue-generating scheme such as a sales tax.

Getting congestion pricing policy passed requires extensive communication and public support because it affects the daily lives of almost all citizens, even those without cars. It takes time and effort to ensure the public realizes the benefits, to accept it as a new tax. Relabeling congestion pricing and framing it as part of a municipality's boarder low-emission policy helps emphasise the impact in reducing air pollution.

Municipalities need to dedicate resources to monitor and report on the impact of congestion pricing so it can release the performance, operation and finance of congestion charging regularly. Data transparency can help justify the need for congestion pricing in the first place and generate long-lasting public support to continue the policy once implemented.

Congestion pricing garners revenue for financing sustainable transport projects. Policies require collaboration between the transport and finance wings of government.  Municipalities must account for the high capital investment of installing the necessary technologies often through cost benefit analysis. This is not an easy task, better done before beginning to implement the project than midway through.  In other words, congestion pricing policy requires strong governance, effective public communication and consultation, smart use of the new revenue, and rigorous monitoring and reporting.  Developing policy and getting it passed is, in itself a telling test of any government’s effectiveness, reliability, transparency, and accountability.

Congestion pricing is slowly being courted as a way of resolving transportation issues in a number of the worlds largest urban centres.  Why?  Because desperate times call for desperate measures and, ultimately, because it makes sense. . . or at least, it makes sense to me.  Check out some of the links below and let me know if you agree.

Note:  Congestion pricing is not limited to transportation; it can be used with any service that faces varying levels of demand by time of day, such as electricity.