Road Congestion Charging

"Congestion imposes huge costs on the economy. These costs include unpredictable travel times, environmental damage, property damage, delays, and lost production".

(Deloitte Research)Congestion is a major problem, it affects important cities all around the world. The average speeds of road travel in many cities aren't much greater today than they were in the days of horse drawn vehicles. Without radical changes congestion is only going to get worse. In Western Europe for instance, it is forecast that gridlock will rise 188% on urban roads by 2010 (Deloitte research).

When making a journey a motorist is not likely to take into account the congestion cost of that journey, but will only take into account the price of petrol and the opportunity cost of the time he spends travelling. There can however be costs incurred on other motorists which individual motorists don't take into account, these are 'external costs', these include, pollution, noise pollution and increased risk of an accident. As motorists interact with each other, these affect their personal costs, but motorists ignore them, so drivers don't actually take into account real costs (social costs) of congestion (Griffiths and Wasll-pg260).There are 3 ways to address increased traffic, they are:1. Tolerate the congestion2.

Build more road capacity3. Road pricing (Henry Spurrier lecture 2003)One scheme that has showed real promise in reducing congestion in areas where point 1+2 are not realistically applicable is road pricing. Road pricing has been implemented in some major cities around the world including London, Singapore and Trondheim. "Roads are a commodity just like roof tiles and roller skates and to have an efficient economy, commodities need price" (Anna Navidski and Andrew Oswald Economics Department at Warwick University). The basic principle of road pricing is that the toll is set deliberately high at peak times and is set lower when the roads are quieter, this way road use is sold in a rational way and people buy what they need.

This allows busy roads to flow and means that the decision by one driver to take his car does not contribute much to negative externalities such as pollution and congestion. Road pricing also raises other economic aspects. It can be used to raise revenue, which in turn can be set aside to improve public transport. The main principles of road pricing are:* Efficiency - road pricing will reduce delays, improve reliability and prioritise high value trips* Protection of the environment - It should help the environment by reducing pollution, such as gases (CO2, SO2), and also limit damage to environmentally sensitive sites* Social benefits - Increased revenue would improve public transport, and other aspects of the road system* Safety - it would improve safety by reducing traffic levels and evening out traffic speeds* Economic growth/Finance - it would free up potentially productive time for companies, enabling them to manage their time more efficiently, it would also raise a substantial amount of revenue on a regular basis (www.env.leeds.

ac.uk)The effects that road pricing would have, are that it would free up road space for public transport, taxis and emergency vehicles. It was estimated that congestion accounts for 90% of bus delays in central London (www.aclondon.

org.uk).Road pricing has been implemented in major cities such as Singapore, Trondheim, Melbourne and London.London - London adopted the "area scheme", this is a scheme that charges road users to drive in an area that has a closely integrated road system (www.

deloitte.com).Every morning 25 lanes of traffic would try and enter central London, this would leave drivers stuck in their vehicles for hours. This has lost the economy an estimated �2-�4 million a week.

However since the road pricing scheme came into operation in February 2003,1. Traffic speeds are up 37%2. Congestion is down 40% during charging hours3. Number of vehicles driven in the zone has fallen 16%4.

journey time on a round trip to and from the zone has fallen 13% (www.deloitte.com).Singapore - Singapore were the pioneers of the "area scheme", which was introduced in 1975. They charged for entering a 6 square kilometer area of the busiest part of the city, unless the driver had 4 or more people in the car.

The benefits of this scheme were,* Immediate reduction of 24,700 cars during peak times and a 22% increase in average traffic speed* Traffic in the zone reduced by 13% during charging period (7.30am-7pm)* Total vehicles cut from 270,000 to 235,100* Car sharing has increased and there are fewer solo drivers* Vehicle trips shifted from peak to non-peak times (www.cfit.gov.uk)Trondheim - The Congestion charging was made live in 1991.

The system was introduced to fund the development of new roads so that traffic would not pass through the city centre. The charging period was set between 6am-6pm, but only during the week. The congestion charges do not apply on the weekends. The benefits of introducing congestion charging to Trondheim are,1. Peak hour rush instantly dropped by 10%2.

Revenues from the tolls have paid for many improvements to roads and bypasses to further cut congestion3. The revenue has also improved the public transport system giving commuters other options to travel into the city centre (www.cfit.gov.uk)Melbourne - The introduction of road pricing in Melbourne has,* Reduced congestion in the north and west of Melbourne* There is now significantly less pollution, and the local streets are a lot safer* Journey times are significantly reduced compared to those of similar roads.These schemes all had problems in the beginning with enforcement as motorists are trying to find ways around paying, such as stealing number plates, and also replication of number plates, however with technological advances these problems have been overcome.

For example in Singapore Electronic road pricing (ERB) was introduced in 1998, this deducts credit from the cash card that is attached to the windscreen. These cards can be topped up from petrol station to newsagents. This stops drivers having to slow down to pay manually for tolls and it is also convenient for the road user. In Melbourne and similarly in London (see figure 1), e-tags are attached to the windscreens and read by overhead cameras, this is vehicle identification technology, which is again convenient to use. If the driver is recognised and does not have enough credit to pay, he is charged a standard fee.

Not everybody will be a winner if congestion charges are introduced. In the immediate aftermath of the introduction of theses charges groups such as small businesses would be affected. Small businesses are likely to find themselves spending a high proportion of time in these charged areas, increasing their transport costs, however they would still benefit from reduced congestion. Other groups include, existing public transport users. With the incursion of area costs, public transport companies are likely to have increased costs, which is then handed on to the consumers in way of increased prices, however again the likely increase in demand will mean that there is an increase in availability of these public services.

The average motorist is going to be forced into a decision of whether facing the inconvenience to change to other modes of transport or incur the costs which might not be financially good value to them. There are however groups that will benefit immediately after the introduction of the congestion charge, these include high income car users. High income is usually associated with high value of time, so with less congestion, journey time will be reduced, and only a small amount of income will be spent relative to the value of the time. Motorists making important deliveries and journeys.

The congestion charges will mean that there will be less traffic and journey times will be much shorter (www.env.leeds.ac.uk).

There are a couple of barriers in implementing a road congestion charge, these can include,* Drivers find it difficult to accept the idea in that they should be charged for congestion, which is something nobody wants, as opposed to paying for something they wish to acquire. They feel they are victims of congestion rather than contributors to it (www.econ.cam.ac.

uk).* Political opposition - If there is public opposition then there is going to also be political opposition, this can become quite vocal. In the case of London, the Mayor was a big advocate of this pricing system, "The mayor of London has recognised road pricing is the future" (Navidski and Oswald)SummaryWith the introduction of new technology, and the changing public perception of road pricing, it is fast becoming the most widely used or considered method of controlling congestion. As shown in the examples above, a number of cities have implemented this with a good deal of success in cutting down congestion in peak times.

After the initial immediate impacts of congestion charges, the revenue generated, (depending on how it is used) should benefit everybody, for e.g. the small businesses that would be affected initially might be entitled to lower taxes to compensate the charges, and people on low income also may be subject to lower taxes to counter the charges incurred by road pricing. Not only will there be less congestion, more revenue generated for the government to improve the existing infrastructure, there would also be a significant reduction in environmental factors.

Pollution, noise pollution and accidents would all decrease. The introduction of congestion charges has many positive points, and in the cities it has been implemented in, it has significantly decreased congestion, making it a vital tool in combating congestion in inner cities.