National Academies Press: OpenBook

International Perspectives on Road Pricing (2005)

Chapter: Keynote Addresses

« Previous: Setting the Stage
Page 23
Suggested Citation:"Keynote Addresses." National Academies of Sciences, Engineering, and Medicine. 2005. International Perspectives on Road Pricing. Washington, DC: The National Academies Press. doi: 10.17226/13667.
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Page 23
Page 24
Suggested Citation:"Keynote Addresses." National Academies of Sciences, Engineering, and Medicine. 2005. International Perspectives on Road Pricing. Washington, DC: The National Academies Press. doi: 10.17226/13667.
×
Page 24
Page 25
Suggested Citation:"Keynote Addresses." National Academies of Sciences, Engineering, and Medicine. 2005. International Perspectives on Road Pricing. Washington, DC: The National Academies Press. doi: 10.17226/13667.
×
Page 25
Page 26
Suggested Citation:"Keynote Addresses." National Academies of Sciences, Engineering, and Medicine. 2005. International Perspectives on Road Pricing. Washington, DC: The National Academies Press. doi: 10.17226/13667.
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Page 26

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Keynote Addresses

1 7 Central London’s Congestion Charging Scheme Has It Achieved Its Objectives? Derek Turner, Derek Turner Consulting On some occasions, a simple question—has theLondon charging scheme achieved its objec-tives?—can produce a simple answer, which in this case is yes. Since its implementation on February 17, 2003, the program has met all expectations, and the latest figures show that 60,000 fewer car move- ments per day are entering the center city charging zone, and about 110,000 people per day pay the congestion-based charge. Interestingly, 1 month after its implementation, Mayor Ken Livingstone, who was the program’s tireless proponent, was receiving approval ratings 25 points ahead of his nearest rival. The program was successfully implemented for a number of reasons, including political commitment, strong public relations, strong project management, and an effective procurement strategy. Equally important, the congestion charging scheme was put forth as one element of a much broader strategy that included signalization improvements, public transportation improvements, infrastructure repairs, and technological innovations; together these worked to demonstrate the government’s commitment to the supply side of the transport equation, as well. Once it was clear to public officials and the public at large that these supply-side investments were not sufficient to combat the choking congestion in central London, demand management became an obvious consideration. It is remarkable that the system, as eventually implemented, is not so different from the proposals that emerged from the Smeed commission back in 1964. Some 40 years later, we have found that congestion charging is one of the few policy proposals that can truly unite the left and the right, which in itself makes one of the strongest arguments for how essentially correct the proposal must be. The benefits realized thus far are impressive. Journey times to, from, and across the priced zone are down by 14%. Time spent stationary or traveling at less than 10 kilometers per hour is down by 25%. Benefits are evident on the public transport side as well, with excess bus wait- ing times for routes serving the charge zone down by 33%. And in a side benefit that few made specific mention of early on, we are seeing fewer road accidents. Revenues for 2003 and 2004 are projected at £68 mil- lion, and the mayor is using these revenues to boost invest- ments in public transport, and especially bus service. In this way, congestion charging creates one of those rare but delightful virtuous spirals in which the consequences of one action create benefits that continue to build on them- selves. This stands in stark contrast to capacity expansion, which serves only to create more demand and an ongoing cry for more and greater investment. Because of the demand-side benefits that are so evident in the London program, I believe it is time to stop talking about fees, taxes, and tolls and instead start referring to demand management, variable pricing, and congestion charges. Above all, the London experiment has demon- strated that enthusiasm and a can-do attitude can deliver what is commonly viewed as an impossible project.

1 8 Out on a Limb Pricing Futures Kenneth Small, University of California, Irvine The experience of the past 20 years has producedtwo major forms of congestion pricing: systemsthat focus on city centers and systems that target express traffic. Both forms of pricing can be shown to solve an array of problems. Congestion itself is the most obvious problem that road pricing addresses, but pric- ing can also be beneficial to public transit and can com- bat urban sprawl and related land use problems. Muddling through is, of course, an alternative to pric- ing, since congestion is at some point and by definition self-limiting. However, the costs exacted by a muddling- through strategy would be high indeed; as public offi- cials and the public generally begin to understand these costs, road pricing can become more politically viable just as it is becoming more technologically viable. The expanded use of pricing in the past 10 years can be attributed to several factors, including a growth in technical expertise and a keener understanding of the merits of the program itself. Lessons learned from past mistakes are also critical to making today’s pricing pro- posals more viable than those of the past. As we exam- ine the various applications of both forms of pricing, four major lessons emerge that can help inform the approach for the future. First, as we look ahead, congestion pricing proposals are likely to develop as niche strategies. They will take advantage of differences among users in order to offer a type of service that appeals to particular segments of the population. The importance of such strategies is sup- ported by recent research showing that user heterogene- ity greatly affects the welfare evaluation and optimal design of value pricing schemes. Second, additional pricing experiments can be expected in cases where the level of congestion is widely considered to be unacceptable. People are learning that there are no other feasible options for solving congestion. Solving con- gestion is not strictly necessary because it tends to be self- limiting; it is disliked and inefficient but not necessarily a problem of highest priority. In the United States, most experiments are likely to be incremental: changes in toll policy on existing toll facilities or addition of high- occupancy toll lanes or FAST1 lanes. Elsewhere more large-scale experiments appear to be politically feasible. Third, as large-scale experiments unfold, as in Lon- don, analysts will turn to measuring and documenting the effects on economic productivity. Some preliminary studies have suggested that a priced area need not nec- essarily become less attractive to business; theory sug- gests that how revenues are spent is important to this question. The relationship between congestion pricing and economic conditions is still poorly understood and stands as a prime area for further research. Finally, where pricing is anticipated or in place as new roads are developed, we should begin to see changes in roadway design. Pricing shifts the trade-off away from the need to provide capacity and toward the desire to maintain aesthetic qualities and conserve scarce urban land. A result might be more parkways or “superstreets” designed for moderate free-flow speeds and moderate capacity. A speculative suggestion is that pricing might be used as a tool for limiting speed to make such road designs safer when traffic is flowing freely. 1“Freeing Alternatives for Speedy Transportation,” a term used in legislation introduced in the House of Representatives in 2003.

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TRB Conference Proceedings 34: International Perspectives on Road Pricing is the proceedings of the International Symposium on Road Pricing held on November 19-22, 2003, in Key Biscayne, Florida. The event was a collaborative effort of TRB, the Florida Department of Transportation, the Organization for Economic Cooperation and Development, and the federal Highway Administration. The report includes two commissioned resource papers that examine the evolution of congestion pricing and the state of the practice in road pricing outside the United States. The proceedings also explore pricing successes and the challenges that have accompanied specific projects’ implementation, as well as the potential evolution of road pricing in the future.

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