Wednesday, March 31, 2010

Congestion Pricing

Matthew Yglesias offers up another reason to support congestion pricing and sees some form of road pricing as inevitable:
As I said before, someday people are going to look back on the Unpriced Road Era and be baffled. Then someone will point out that for the first several decades of the relevant period, the technology simply didn’t exist to do the tolling in a feasible way. That created an unpriced road status quo, which became extremely psychologically powerful for years after the unpriced road model had become technologically obsolete.
I actually wrote a paper about this topic a couple of years ago and even made up a cute acronym for the legislation that would make such pricing a reality. Our goal was to think of a policy that is not currently in place but would be in 100 years and that a future society would find inconceivable that we didn't have said policy in our dark early days. Apparently the professor only wanted us to write about gay marriage, which she mentioned frequently, because she found my topic very boring and dull. I'm glad Matt doesn't agree.

1 comment:

  1. Road Pricing is not inevitable.

    We have 100 years of history where road pricing was not inevitable and was not considered. What has changed is the insatiable appetite for taxation by inept and incompetent governments.

    As a result, they dream up ever more complex ways to increase revenue without it seeming like a tax.

    Road Pricing is one of the 'holy grails' of taxation. If a government can individualise a tax, it becomes less controversial and easier to impose. Road Pricing is just such a tax.

    Instead of headlines shouting "Fuel Taxes Increase" which is a national issue, road pricing allows individual stretches of road to increase in price without the widespread 'hue and cry' from national tax increases.

    Effectively, this is the 'divide and conquer' principle where a price increase along a local road will not have the same political consequence as national fuel tax hikes.

    There are several overriding problems with Road Pricing as a concept. Firstly and most importantly is the civil liberties issue because any 'pay-as-you-go' system of charging for road use inevitably needs to know where you were and at what time for the bill to be prepared.

    Secondly, the cost of making Road Pricing work is fantastic. Every single vehicle will need a complex tracking and communication device costing upwards of £250. Then the national infrastructure to monitor the road use and then the enforcement system will need to be installed.

    On top of this there is the back office and administration costs.

    All of this is estimated by the UK government to be around £60 billion. The estimate for the administration is £6 billion every year.

    On top we must add the deprecation on the 'asset' which means the tracking and enforcement equipment will need replacing about every 7 to 10 years - further significant costs.

    And finally, the public are not prepared for this. The UK tried to introduce Road Pricing which caused a significant public outcry and it was abandoned.

    The Dutch then made an valiant effort to introduce it. The government fell which was in no small part the result of the road pricing policy and now the new government has abandoned it.

    The bottom line is we already pay many time over for the roads we use - the motorist contributes some £40 Billion net every year to the Treasury after spending on roads.

    What we should expect is a government which is frugal and sensible with spending our money and invests in the transport systems of choice - which is the car and roads.

    We do not need road pricing, we do not need further costs and taxation, what we need is a fair deal for motorists who pay too much in taxation already.

    Governments of any persuasion need to grasp the mettle invest in the road network without further costs and administration from a Road Pricing regime.

    After all, road users already pay for this service.