Congested Thinking about Congestion Charging

TheDominion Post of Friday 18 April had a front page article on congestioncharging for the Wellington region at peak commuting times.   Congestion chargeshave much theoretical merit, but the conditions under which they deliver arebeneficial are not that easy to assess.   As I read through the article I becameprogressively more concerned about the proposed scheme.   Let’s start by lookingat those aspects of the proposed scheme that really are complete rubbish.

Thefirst one is that hybrid cars might be exempt (similar to the London scheme)presumably because they produce fewer greenhouse gas emissions.   However, acongestion charge is a very inefficient way to reduce greenhouse gasemissions.   As I mentioned in a previous article, we have an Emissions TradingScheme for that purpose and the last thing we want to do is put a differentprice on carbon saved in commuting than on carbon saved in say electricitygeneration.   It makes about as much sense as claiming that dieting on aWednesday is worth more than dieting on a Thursday.

Thenext possible exemption that was mooted is taxis.   Again a taxi causes as muchcongestion per commuter journey as any other car – in fact probably more aschances are that the taxi is driven without a passenger between jobs.

Thenwe have goods vehicles.   Another absurd exemption.   Not only are they generallylarger than the average car and thus require more road space, they also blocklanes during pick-up and delivery.   If there was ever a group of vehicles thatshould be discouraged from entering the city at peak times surely this it?  

Thelast exemption proposed was for people with low incomes.   The administrativecosts of such an exemption are bad enough, but the central point of congestioncharging is that everyone should face the same price signal for access to aparticular road at a particular time.   If this is deemed too costly for somegroups, compensation should be via the tax and benefit system.

Sothat’s four of the dumbest aspects of the proposed scheme.   Put up your hand ifyou’re reading this and suggested those features.

Nowconsider another argument in the report cited in favour of congestion charging,that it would boost the use of public transport.   Well it probably will, butthere are better ways to achieve that objective.   Start by looking at thosefactors that most deter people from using public transport.   Passenger surveysworld-wide invariably come up with the same reasons – reliability, speed andcomfort.   With regard to Wellington buses, reliability is a key factor.   Evenreal-time electronic timetables at bus-stops (as exist in other cities) will atleast provide information to patrons.   One of the worst aspects of waiting fora bus is not knowing if it’s come through early, if it’s late – how late, orwhether it’s going to come at all.

Buslanes through the city enhance both the speed and reliability of publictransport, though I hesitate to promote this approach too much for fear thattomorrow I’ll learn that an urban transport planner has decided that a major arterialroad is about to be partitioned to make room for a bus lane.

Let’sassume that the sillier aspects of the scheme wouldn’t be implemented.   Is itthen justified?   A bit of theory is called for.   Congestion is sometimesdescribed in economics as an externality – where the actions of one group havean adverse effect on another group.   Congestion though, presents an interesting case in thatthose who create the externality are also largely those on whom the costinitially falls.   The aim of congestion charging is to find the balance betweenthose who are prepared to pay for the use of the road at a particular time andplace, and the full cost of expanding road capacity.

It isimplicit in this argument that road capacity is adequate outside peak hours.  Well, take a trip through Wellington and its environs during the weekend.  There are areas where congestion is worse than during peak times and where itlasts for much longer periods of time.   Subject to some thorough cost-benefitanalysis, it seems to me that there are improvements to the roading networkthat need to be considered before congestion charging becomes the optimumpolicy to reduce congestion.   For example, the new Karo Drive (the main routefrom the Basin Reserve to the motorway) should have been trenched as originallyproposed, with a similar system for cross town traffic going east.   A paralleldevelopment at Melling to that currently being built adjacent to Maungaraki isanother example.   And one need hardly mention the fiasco on SH 1 throughKapiti.

Finally,there are numerous other factors that contribute to congestion.   For example ithas probably not escaped the attention of the average commuting driver that themorning peak is much less congested during school holidays.   Perhaps shiftingthe timing of the school day should be considered.   Then there are particularintersections and stretches of road where traffic light phasing is just awful.  And numerous places where very minor differences in lane layout would producetime savings and reduce congestion for both private and public transport.

Theremay be a role for congestion charging, and from an economist’s perspective ithas some nice properties, but the scheme proposed last week for Wellington is a shambles.

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