Saturday, 20 November 2010

Australian student's congestion charging idea only half right

The Sydney Morning Herald has reported on what a Queensland engineering student has suggested regarding road tolling - he wants to abolish tolls on major highways and introduce urban congestion charging.   This has produced quite a response of support, but unfortunately Jake Whitehead (the student) while observing correctly some of the benefits of urban congestion charging has missed two vital points.

Jake has suggested routes that bypass the city should be free, but driving in the city should be charged.  On top of that the money raised should go on public transport.  In other words he is simply replicating what he saw when he visited Europe,  unfortunately he didn't think carefully about the urban form of European cities compared to Sydney, for they are very different.

The first criticism of his point is the obvious issue that if tolls don't pay for these privately financed motorways, why should those who don't use them pay?  Whilst there are some significant external benefits from using toll motorways compared to surface routes, the key beneficiaries are the road users.  Tolling such routes (which is unknown in Europe) competes directly with rail services, so ensures the long run capital costs of the motorways are recovered by the users, meaning the real infrastructure costs are met by those users, not spread more widely.   The number of motorists likely to use surface streets for such trips are going to be low, except for specific cases like the Sydney Cross City Tunnel.   Arguments for congestion charging are not arguments against properly pricing very expensive pieces of infrastructure.

Secondly, congestion charging does make economic sense and does work, as has been seen in Singapore, Stockholm and London.   However, copying what high density cities, mostly with oldworld urban form (or in Singapore's case, centrally planned, not that Jake studied Singapore) does not necessarily work for new world cities.  After all Sydney is a far lower density city with far more diverse travel patterns than cities which are more CBD centric.   Simply charging the Sydney CBD may do little for congestion.

However, there is no reason why congestion charging, as a concept, can't be applied more intelligently.   For starters, allowing peak charging on tolled motorways would help.  Bear in mind that car commuters over long distances are going to use these motorways anyway.   However, the wider issue of charging for congestion should not be about cordons or area charges, but reform of the whole road charging area.   That means replacing annual ownership charges and fuel taxes with distance based charges.   

Jake isn't an economist, so it is unreasonable to expect him to take an economics led approach, but it shows that whilst observing traffic engineering and planning practices alone is valuable, it isn't enough.

So policy advisors should take partial heed of what has been said, but the answers to Australia's traffic problems wont be found in transplanting European led solutions.

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