Information about Road Pricing

Road pricing is a term used to cover all the various charges applied for the use of roads. The term includes fuel taxes, licence fees, tolls, and congestion charges, including those which may vary by time of day, by the specific road, or by the specific vehicle type, being used.^[1]

European application

Facing rising levels of traffic congestion, European governments are giving serious consideration to nationwide road pricing schemes which would exploit the new Galileo satellite positioning system. Every vehicle would have to contain a satellite tracking device which would determine which roads were being driven along, for how far and at what time of day. This information would then be sent to a central computer system.

See Toll roads in Europe for details on all countries.

Germany

Schemes for charging trucks (lorries) in Germany by the company Toll Collect, and Austria are already underway. Under the German scheme, which went live on January 1, 2005, trucks pay between €0.09 and €0.14 per kilometer depending on their emission levels and number of axles. The expensive scheme, combining satellite technology with other technologies, suffered numerous delays before implementation, whilst a scheme using much simpler technology in Austria was up and running in 2004. In the UK, the Labour government announced in July 2005 that the proposed UK truck road user charging scheme would not go ahead.

Italy

There is a small congestion charging zone in Rome.

Malta

A fully automated system called a Controlled Vehicular Access (CVA) system has been launched in Malta's capital city of Valletta since 1 May 2007 ^[2]. A number of innovations have been introduced including variable payments according to the duration of stay, flexible exemption rules, including exemptions for residents within the charging zone and monthly billing options for vehicle owners.

Norway

One of the earliest schemes was introduced in Bergen in Norway in 1986.^[3]. Only traffic entering the town is charged and only during weekdays from 06.00 through to 22.00. Public service vehicles pay no charge.

The system is fully electronic using a system called AutoPASS with most local drivers purchasing a tag which is automatically read on passing the detectors. The same system is used throughout Norway for toll roads and congestion charging schemes etc. Motorists without a tag pay a fee at a manual barrier.

Sweden

Main article: Stockholm congestion tax

Stockholm has a congestion pricing system, Stockholm congestion tax,^[4] in use on a permanent basis since August 1, 2007,^[5][6] after having had a seven month trial period from January 3 to July 31, 2006.^[7] The City Centre is within the congestion tax zone. All the entrances and exits of this area have unmanned control points operating with automatic number plate recognition. All vehicles entering or exiting the congestion tax affected area, with a few exceptions, have to pay 10–20 SEK (1.09–2.18 EUR, 1.49–2.98 USD) depending on the time of day between 06:30 and 18:29. The maximum tax amount per vehicle per day is 60 SEK (6.53 EUR, 8.94 USD).^[8] Payment is done by various means within 14 days after one has passed one of the control points, one cannot pay at the control points.^[9]

UK and congestion charge

Main article: Motoring taxation in the United Kingdom

The current government did not originally float the idea of road user pricing for all UK vehicles; the government was also studying the idea in the 1980s, though principally considering tolling to pay for the construction of the motorways rather than to control congestion. In the early 1960s, the Smeed Report considered how to implement congestion charging.^[10]

Durham became the first city in the UK to have a permanent congestion charge in 2002.^[11] London has had a congestion charge in the central area since 2003. The organisation responsible for the charge is Transport for London (TfL). The fee was introduced on February 17, 2003.^[12] Initially set at £5, then raised on July 4, 2005, to £8,^[13] the daily charge must be paid by the registered keeper of a vehicle that enters, leaves or moves around within the congestion charge zone between 7 a.m. and 6 p.m. (previously 6:30 p.m.), Monday to Friday. Failure to pay the charge means a fine of at least £50. A similar scheme is proposed in Manchester (see Manchester Congestion Charge), covering a wider area but with a much smaller daily charging window covering the morning and evening rush hours.

Extensive studies are being done on introducing a scheme for all UK vehicles, with an aim to implementation at the earliest around 2013. In October 2005 the UK government suggested they explore "piggy-backing" road pricing on private sector technologies, such as pay-as-you-go insurance (also known as Pay As You Drive PAYD), thus avoiding a large-scale public sector procurement exercise. If introduced, this scheme would likely see a charge being levied per kilometre depending on the time of day, the road being driven along, and perhaps the type of vehicle. For example, a large car driving along the western section of the M25 in rush hour would pay a high charge; a small car driving along a rural lane would pay a much lower charge. The very highest charges would be likely in the most congested urban areas. It is expected that rural motorists would benefit the most from such a scheme, perhaps by paying less through road pricing than they do at present through petrol and car taxes, whereas urban motorists would pay much more than they presently do. However, this is highly dependent on whether such a scheme would be designed to be either revenue neutral or congestion neutral. A revenue neutral scheme would replace (at least in part) petrol and vehicle taxes, and would be such that Treasury revenue under the new scheme would equal the revenue from current taxes. A congestion neutral scheme would be designed so that growth in congestion levels would stop as a result of the new charges; the latter scheme would require significantly higher (and increasingly higher) charges than the revenue neutral scheme and so would be unpopular with the UK's 30 million motorists. The carbon emission consequence of moving from fuel duty to a charge per mile has been raised as a concern by some environmentalists, as has any diversionary response from heavily trafficked (and hence more expensive) roads. The UK government announced funding for road pricing research in 7 local areas in November 2005.

In June 2005, Transport Secretary Alistair Darling announced the current proposals to introduce road pricing.^[14][15] Every vehicle would be fitted with a satellite receiver to calculate charges, with prices (including fuel duty) ranging from 2p per mile on uncongested roads to £1.34 on the most congested roads at peak times^[16]

A 2007 online petition against road pricing, started by Peter Roberts and hosted by the British government, attracted over 1.8 million signatures, equivalent to 6% of the entire driving population. Over 150,000 signatures were added during the last day before the petition closed on Februray 20, 2007. In reply, the prime minister has e-mailed the petitioners outlining his rationale, denying that the proposals were to introduce a stealth tax or increase surveillance, and promising 'debate' before a decision was made as to whether to introduce a national scheme.^[17] Also, in a recent poll 74% of those questioned opposed road pricing.^[18]

Singapore

Main article: Electronic Road Pricing

The Electronic Road Pricing is an electronic toll collection scheme adopted in Singapore, implemented by the Land Transport Authority in September 1998 to replace the Singapore Area Licensing Scheme after successfully stress-testing the system with speeding Lamborghinis, Porsches and Ferraris. It is the first city in the world to implement an electronical toll collection system.

New York proposal

Main article: New York congestion pricing

On April 22, 2007, Michael Bloomberg, the Mayor of New York City, citing what he considered to be successes in London, Singapore and Stockholm, proposed a plan^[19] to charge $8 per day for cars to use the streets of the central business district (southern half of location, but drivers who wanted their tolls collected automatically could have a transponder like the E-ZPass already used to collect tolls on tunnels and bridges.

Immediately following the April 22nd announcement, a coalition under the banner Campaign for New York's Future came out in support of the Mayor's sustainability proposal, PlaNYC 2030. Others opposed it, saying it would cause asthma or create "rat run" districts at the border. Opponent of the plan, state lawmaker Richard Brodsky issued a report on what he believes will be the plan's harmful effects. He calls it a "regressive tax" on the poor and middle class and harmful to citizens of New York City's outer boroughs.^[20]

On July 16, 2007, the New York State legislature shelved the proposal to bring congestion pricing to Manhattan.^[21] A week later they passed a law creating a 17 member New York City Traffic Congestion Mitigation Commission to study methods.

Criticisms

Opposition to road pricing, when coming from the broad political left is largely directed at perceptions of fairness.^[22] Charging for something that was once "free" may be seen as unfair. Road pricing has the possibility of being a regressive tax, in that a flat-rate tax falls more heavily on poor drivers than the rich (the fuel tax, while moderately regressive, gives much more incentive to poor drivers than rich drivers to drive more fuel-efficient cars, thereby somewhat negating its regressive aspect). A way for the government to deflect this criticism would be to use the toll revenue to reduce other, equally regressive taxes. New toll roads in a largely free system may be seen as punishing one area when the rest of the system enjoys toll-free motoring. Proponents of pricing would counter the fairness or equity argument by stating that pricing creates a choice, and choices are fair because people are not identical, sometimes people have high values of time (e.g., when they are late for an appointment), sometimes they have lower values of time (e.g., when they are enjoying the drive). The proponents would thus suggest that making all drivers pay the same tax to receive the same service isn't fair if people value the service differently. Another argument is that, while road pricing may be unfair to some road users, the alternative, ie. congestion is unfair to all road users, since it wastes everyone's resources. The ultimate fairness of road pricing is only determined once the use of any net revenues is taken into account. However, in London, the Congestion Charge was introduced by Ken Livingstone who is generally regarded as a rabid left-winger.

Conservative critics such as Steven Norris, on the other hand, say that "free" roads produce positive externalities that outweigh the opportunity cost of congestion, i.e., that road pricing reduces the overall number of journeys, thus harming business and economic growth. In particular, Steven Norris argues that the cost of the congestion charge disproportionately hits low-paid workers whose working hours start at night when public transport is not available and end when the congestion period is in force, indirectly hitting London's service economy. However, Norris ignores the time limits of the London congestion charge which apply only between 7am and 6pm.

Motoring interest groups see road pricing as an additional financial burden on already allegedly over-taxed car owners. Many are not opposed to road tolls as such, but wish to see them as a replacement for fuel tax rather than an additional charge.^[23]

Some groups of libertarian inclination, such as the Association of British Drivers, criticize road pricing on the basis of individual rights. They argue that freedom of movement is a fundamental right that should not be infringed through financial barriers, and sometimes compare the practice to highwaymen. Note that some libertarians in general, however, favor transfer of roads to private ownership, which is likely to result in tolls for individual roads, set on a profit-maximizing rather than an economic welfare-maximizing basis, which in many cases is likely to lead to a higher toll.

Others see proposed schemes, such as PAYD based upon a compulsory GPS tracking system, as an infringement on their rights to privacy, and fear that such a vast surveilance system may be abused.^[24][25]

The general public appears to have concerns about the proposed introduction of road pricing in the UK, with fears that the government could be using it to increase motoring taxes overall.^[26] In 2003, the Institute of Public Policy Research think-tank concluded that overall road pricing would have to raise more money than current taxes if it were to reduce congestion.^[27] Local authorities have been denied access to government transport funds for not including proposals for road pricing in their applications.^[28]

See also

• Toll road
• List of toll roads
• List of toll bridges
• Toll roads around the World

References

Further reading

• Smeed, R.J. (1964), "Road pricing: the economic and technical possibilities", HMSO.

External links

• Road pricing case studies
• Combating Gridlock - Study of Deloitte Research on Congestion Charging
• National Alliance Against Tolls (Campaign against UK road pricing plans)
• An alternative to congestion charging
• Criticism of Road Pricing from SafeSpeed, a libertarian motoring organisation
• Road pricing world wide Overview and cases
• New York City Congestion Pricing Primer