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Committee Findings and Recommendations I mmediately after the symposium's closing session, countries. Much of the experience of the past decade has the conference committee convened to develop its been more successful than anticipated, with fewer consensus findings and recommendations. Consider- adverse impacts and greater public acceptance. This pos- ation of the content of the conference presentations, dis- itive experience--which is occurring in the context of cussion, and resource papers led to the committee's increasing financial necessity, diminishing opportunities identification of a series of key findings, recommended to add capacity, and advancing technological ability-- topics for future research, and suggested areas for inter- makes it important for policy makers to continue to national cooperation. In addition, the committee drew enable and learn from further experimentation. on the resource papers and presentations made through- Despite expanded use of road pricing in Asia, out the symposium to identify a number of potential Europe, and the United States, the pricing structures policy initiatives that were frequently cited in the dis- used in these parts of the world vary. As noted in the cussions. This summary of the committee's findings and resource papers prepared for the symposium, the best- recommendations addresses each of these issues. known road pricing projects in Europe and Asia involve cordon or area pricing, typically with drivers paying a fee to cross a cordon and enter a congested central city KEY FINDINGS area during business hours. Alternatively, in the United States pricing projects have tended to focus on drivers' The state of the practice in road pricing has advanced use of a specific facility, such as a highway, where fees considerably since the publication of Curbing Gridlock are levied for travel during periods of congestion. in 1994, at which time congestion-based pricing Pricing's transformation from a theoretical construct schemes were largely a theoretical proposition rather to a real-world application is underscored by new than a practice. More recent contributions were the national policies providing greater official sanction for European Commission's 1998 White Paper on Fair Pay- pricing experiments. These include the European Com- ment for Infrastructure Use, which made a general call mission's 1998 call for the phased introduction of mar- for the phased introduction of marginal social cost pric- ginal social cost pricing for infrastructure use and, in the ing for infrastructure use, and its 2001 White Paper on United States, national legislative proposals to provide European Transport for 2010, which specifically called state and local officials with broader discretion to use for the gradual replacement of existing transport system "value pricing" on federally funded roads. taxes with more effective instruments for integrating While the efficiency gains produced by road pricing infrastructure costs and external costs. projects are largely undisputed, the impacts of pricing Over the past 10 years, many pricing experiments initiatives on equity, fairness, and transparency in deci- have been implemented in various forms and in several sion making remain areas of concern. Assessment of the 3
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4 I N T E R N AT I O N A L P E R S P E C T I V E S O N R O A D P R I C I N G relative impacts of pricing arrangements on various suggests that citizens' anxiety about planned road pric- groups stratified by income, ethnicity, gender, employ- ing projects far exceeds their actual dissatisfaction with ment status, residential and job location, and other pricing once a project is in place. In fact, while resistance characteristics continues to be a prime area for research. to pricing can be a potent barrier to implementation, Development of strategies to mitigate inequitable distri- recent surveys demonstrate unexpectedly favorable atti- butions of costs and benefits also merits attention. For tudes toward the implemented project. For example, one example, policy makers increasingly recognize that recent survey indicated that both users and nonusers of "revenue recycling," whereby some or all of the rev- priced lanes typically perceive travel time savings to be enues generated through a pricing project are returned even greater than those actually realized. Other surveys to the public at large either as direct credits or as subsi- indicate that highway users are becoming increasingly dies to public transportation, can help reduce adverse skeptical that added capacity can reduce congestion in a equity impacts. sustainable way and are increasingly convinced that Many at the symposium believed that revenues from efforts to manage demand could be more beneficial. priced facilities should be available first and foremost to With some of the more difficult implementation pay for the operations and maintenance of the priced questions already tackled, concerns that may previously facility, retire debt for that facility, and potentially offer have been treated as lower research priorities can no a return to investors. After these uses, and in part longer be ignored. These areas include methods of because of concerns over pricing's equity impacts, many enforcement; strategies for ensuring privacy; goods conference participants also suggested that the proper movement and pricing; the externalities of pricing; pub- hypothecation (or dedication) of excess revenue is a key lic participation; and a much more sophisticated under- ingredient in a pricing project's success. Views differ on standing of the distributional impacts of various pricing how broadly or narrowly to prescribe the eligible uses structures in light of individuals' income levels, racial or of revenue and how best to disperse the revenue in the ethnic status, gender, residential location, modal local corridor or area. choices, and other relevant groupings. Road pricing is still often perceived to be synonymous The impacts of pricing on location, land use patterns, with traditional turnpike tolling, which leads to the mis- and urban form are still relatively poorly understood, perception that pricing is principally or exclusively a not least because of the difficulty of obtaining empirical revenue-generating mechanism. Unless the transportation data. In particular, the potential impacts of pricing on community or others demonstrate pricing's ability to economic activity in the affected and surrounding areas meet other management objectives, the public and politi- remain a concern. Some initial data are available on cians will continue to view pricing simply as a revenue impacts in particular pricing locations, but additional tool. Pricing advocates will find real-world examples to data and study are needed. be their strongest tool in countering these misperceptions. Effective tools for communicating with and educat- The City of London's area pricing program, for example, ing both policy makers and the public are still needed. is achieving greater delay reductions than had been In the United States, resistance to raising the fuel tax expected. This was the pricing scheme's goal; it was not and concern about the resulting transportation funding concerned solely with raising revenue. Consequently, the shortfall need to be addressed during the coming pricing scheme was a form of demand management decade. Especially at a time when physical constraints rather than revenue enhancement. Moreover, London's make it harder than ever to build new capacity, pricing plan featured an integrated strategy that included road presents one promising alternative to the fuel tax. In signal improvements, public transportation improve- light of pricing's success in ad hoc, project-specific appli- ments, infrastructure repair, and the adoption of new cations throughout the world, it holds promise for inclu- technologies. The tolling examples in the United States do sion as part of a broader and systemic solution to the not exhibit this integrated approach and have mixed coming funding situation. results concerning demand management. In Europe, the contrary problem of far higher but Cordon pricing such as that used by the City of Lon- uneven rates of fuel taxation has led the European Com- don may be less attractive in the United States, accord- mission to advocate a greater standardization of trans- ing to resource paper author Martin Wachs, because of port financing through direct pricing of roads. The the fear that it will drive more people to outlying subur- commission policy also notes explicitly that introduc- ban centers. "American downtowns," he notes, "can be tion of road pricing can either raise more net revenue by said to fear road pricing much more than they fear con- supplementing existing fuel taxes or raise an amount of gestion" (see resource paper by Wachs, p. 69 of these revenue equivalent to that under the existing finance proceedings). system through the use of tax rebates or refunds. Under As noted by many speakers at the conference and as either approach, road pricing is an effective means of highlighted in the resource papers, recent experience managing demand on the road network.