Road pricing
Road pricing are direct charges levied for the use of roads, including road tolls, distance or time-based fees, congestion charges and charges designed to discourage the use of certain classes of vehicle, fuel sources or more polluting vehicles. These charges may be used primarily for revenue generation, usually for road infrastructure financing, or as a transportation demand management tool to reduce peak hour private vehicle travel and the associated traffic congestion or other social and environmental negative externalities associated with road travel such as air pollution, greenhouse gas emissions, visual intrusion, noise pollution and road traffic collisions.
In most countries toll roads, toll bridges and toll tunnels are often used primarily for revenue generation to repay long-term debt issued to finance the toll facility, or to finance capacity expansion, operations, and maintenance of the facility itself, or simply as general tax funds. Road congestion pricing for entering an urban area, or pollution charges levied on vehicles with higher tailpipe emissions are typical schemes implemented to price externalities. The application of congestion charges is currently limited to a small number of cities and urban roads, and the notable schemes include the Electronic Road Pricing in Singapore, the London congestion charge, the Stockholm congestion tax, the Milan Area C, and high-occupancy toll lanes in the United States. Examples of pollution pricing schemes include the London low emission zone and the discontinued Ecopass in Milan. In some European countries there is a period-based charge for the use of motorways and expressways, based on a vignette or sticker attached to a vehicle, and in a few countries vignettes are required for the use of any road. Mileage-based usage fees or distance-based charging has been implemented for heavy vehicles based on truck weight and distance traveled in New Zealand, Switzerland, Germany, Austria, Czech Republic, Slovakia, Poland, and in four U.S. states: Oregon, New York, Kentucky, and New Mexico.
Many recent road pricing schemes have proved controversial, with a number of high-profile schemes in the US and the UK being cancelled, delayed, or scaled back in response to opposition and protest. The tendency seems to reverse, however, when the system is already in place, with the popularity of existing systems often increasing while merely discussed systems face an uphill battle in public opinion. A 2006 survey of the economic literature on the subject finds that most economists agree that some form of road pricing to reduce congestion is economically viable and overall beneficial, although there is disagreement on what form road pricing should take. Economists disagree over how to set tolls, how to cover common costs, and what to do with any "excess" revenues, whether and how "losers" from tolling previously free roads should be compensated, and whether to privatize highways.
Terminology
Road pricing is a general term that may be used for any system where the driver pays directly for use of a particular roadway or road network in a particular city, region, or nation. Road pricing also includes congestion charging, which are charges levied on qualifying road users to reduce peak demand, and thereby reduce traffic congestion and also to place a charge on road users for other negative externalities, including traffic accidents, noise, air pollution, and greenhouse gas emissions.History
The first published reference to 'road pricing' was possibly in 1949 when the RAND Corporation proposed "use of direct road pricing to make freight journeys more expensive on congested routes or to influence the time of day at which freight traffic operates". Nobel-laureate William Vickrey then built on the ideas of the economist Arthur Pigou, outlining a theoretical case for road pricing in a major work on the subject of 1955 proposing in 1959 that drivers should be charged by electronic means for use of busy urban roads. Arthur Pigou had previously developed the concept of economic externalities in a publication of 1920 in which he proposed that what is now referred to as a Pigouvian tax equal to the negative externality should be used to bring the outcome within a market economy back to economic efficiency.In 1963 Vickery published a paper 'Pricing in urban and suburban transport' in the American Economic Review and Gabriel Joseph Roth, John Michael Thomson of the Department of Applied Economics at the University of Cambridge published a short paper titled "Road pricing, a cure for congestion?" The Smeed Report, 'Road Pricing: The Economic and Technical Possibilities', which had been commissioned in 1962 by the United Kingdom Ministry of Transport, was published in 1964. Road pricing was then developed by Maurice Allais and Gabriel Roth in a paper titled "The Economics of Road User Charges" published by the World Bank in 1968.
The first successful implementation of a congestion charge was with the Singapore Area Licensing Scheme in 1976. The Electronic Road Pricing scheme operated as a trial between 1983 and 1985 but was not continued permanently due to public opposition. A number of road tolling schemes were then introduced in Norway between 1986 and 1991 in Bergen, Oslo, and the Trondheim Toll Scheme. It was noticed that the Oslo scheme had the unintended effect of reducing traffic by around 5%. The Singapore scheme was expanded in 1995 and converted to use a new electronic tolling system in 1998 and renamed Electronic Road Pricing. The first use of a road toll for access by low-occupancy vehicles to high-occupancy vehicle lane was introduced in the U.S. on California State Route 91 in 1995. Since 2000, other schemes have been introduced, although the New York congestion pricing proposal and a number of UK proposals were not progressed due to public opposition. In France road pricing came about as an unintended consequence of the way highways are built and financed as most are built by for-profit companies which earn back their expense through tolls. Some other European countries also have similar schemes either on parts of their highway network or only on particularly expensive roads such as tunnels, bridges, or mountain range crossings.
Impact
A study of congestion pricing in Stockholm between 2006 and 2010 found that in the absence of congestion pricing Stockholm's "air would have been five to ten percent more polluted between 2006 and 2010, and young children would have suffered 45 percent more asthma attacks".A 2013 study found that after congestion pricing was implemented in Seattle, drivers reported greater satisfaction with the routes covered by congestion pricing and reported lower stress.
A 2016 study found that more people used public transportation due to the implementation of congestion pricing in Singapore. A 2016 study found that real estate prices dropped by 19% within the cordoned-off areas of Singapore where congestion pricing was in place relative to the areas outside of the area.
Research from 2019 provides a set of tools to enable analysis and measurement of the impacts of toll pricing, toll payment, toll collection technology, and other aspects of toll implementation and rate changes on low-income and minority populations.
Example schemes
Asia-Pacific
Australia
In January 2009, variable tolls were implemented at Sydney Harbour Bridge, two weeks after upgrading to 100% free-flow electronic toll collection. The highest fees are charged during the morning and afternoon peak periods; a toll 25% lower applies for the shoulder periods; and a toll lower than the previously existing is charged at nights, weekends, and public holidays. This is Australia's first road congestion pricing scheme, and has had only a very minor effect on traffic levels, reducing them by 0.19%China
Main roadways and highways in Shanghai are tolled, and an assessment was completed to evaluate the implementation of congestion pricing for vehicles entering the central business district. The city also restrains car use, ownership and there are restrictions on getting a driver's license; since 1998, the number of new car registrations is limited to 50,000 vehicles a year, and car registrations are sold by public auction, with prices reaching up to US$5,000 in 2006. Parking is also limited.Congestion based pricing for Beijing was recommended by the World Bank in 2010 and local officials announced plans to introduce a scheme in September 2011 although no details about the cost or the charge zone have been provided. The city is dealt with traffic congestion and air pollution through a driving restriction scheme implemented since the 2008 Summer Olympics., another 11 Chinese cities have similar restriction schemes in place.
In early 2010 the city Guangzhou, Guangdong province, opened a public discussion on whether to introduce congestion charges. An online survey conducted by two local news outlets found that 84.4% of respondents opposed the charges. The city of Nanjing is also considering the implementation of congestion pricing.
In December 2015, the Beijing Municipal Commission of Transport announced plans to introduce congestion charges in 2016. According to the city's motor vehicle emission control plan 2013–2017, the congestion charge will be a real-time variable pricing scheme based on actual traffic flows and emissions data, and allow the fee to be charged for different vehicles and vary by time of the day and for different districts. The Dongcheng and Xicheng are among the districts that are most likely to first implement congestion charges. Vehicle emissions account for 31% of the city's smog sources, according to Beijing Environmental Protection Bureau. The local government has implemented already several policies to address air quality, and congestion, such as a driving restriction scheme based upon the last digits on their license plates. Also a vehicle quota system was introduced in 2011, awarding new car licenses through a lottery, with a ceiling of 6 million units set by the city authority for 2017. In May 2016, the Beijing city legislature announced it will consider starting levying traffic congestion charges by 2020 as part of a package of measures to reform the vehicle quota system., the city's environmental and transport departments are working together on a congestion pricing proposal.