First a warning. I don't use this blog as a place for debate or polemics, but on this occasion, I have decided to respond to an article which is quite damning, as an example of the sort of debate one endures around the topic of road pricing. This article is by no means the worst I've ever seen, but it is full of assertions with little to no evidence, mistakes and bold claims that appear to be more motivated by a desire to undermine the policy itself (and perhaps this is because it is from a government he himself does not support), than to critically review the merits of it.
The NZ Herald is Auckland’s (New Zealand) newspaper of record. Simon Wilson (no relation) is the NZ Herald’s senior writer on transport issues. Given the NZ Government’s recent announcement of its intention to advance congestion pricing (called time of use pricing), he has written a column on the topic, which is arguably a polemic of weak argument against it. Note it is behind a paywall. I am a subscriber, but it is not worth you paying to read his article though.
It is possible to critique time of use pricing in Auckland on some grounds, such as whether it could be expanded at reasonable cost sufficiently to significantly address congestion, or whether net revenues should be redistributed through tax cuts rather than spending on infrastructure, or if it is better to introduce road pricing more generally, so driving outside congested time and locations is cheaper. It is possible to argue that there should be more and better public transport to accompany road pricing, or that it could cause government to delay or cancel some new road projects, but none of that is apparent.
I’ve spent over 20 years working on road pricing policy around the world and I have seen arguments against road pricing from a range of perspectives. Some on the right see it as an additional tax that intends to limit motorists’ freedom and increases the power of the state against them or is used to invade their privacy through "tracking". Some on the left see it as unfair that a scarce resource (road space) is allocated on the basis of price rather than queuing. Wilson is on the left.
Simon Wilson has written many columns in the past about the importance of tackling climate change, of getting more people out of their cars and into public transport or active modes. He is a fervent believer in behaviour change in urban transport policy. Now he is making himself perhaps the highest profile campaigner against the one policy that could achieve more of what he claims to want than any other – more efficient road pricing.
He titles his article “Sorry Simeon Brown, congestion charges are not the key to freeing up the roads”.
He’s wrong. I doubt Wilson can identify a city in the world that has freed up its roads without road pricing, he certainly doesn’t name any. Short of Pyongyang (or Covid lockdowns), I don’t know of any major city in the world without road pricing that has significantly reduced congestion, although certainly some that have it do still have severe congestion (notably London). Singapore and Gothenburg certainly have much less congestion than before either city had congestion pricing, Stockholm has much lower congestion approaching its central city and along its main bypass route (although there remains congestion elsewhere in its network). Milan still has bad congestion, although it is better with pricing. Wilson does not indicate which cities on a scale of Auckland have freed up their roads without either road pricing or depopulation
So what else did he have to say?
He repeatedly asserts that time-of-use pricing, congestion charging etc is a “tax”, which presumably he is saying for pejorative impact to appeal to readers on the right of politics (new taxes are "bad" from a traditional rightwing perspective). Whether or not it is a tax would be a legislative matter. I’m not sure if he thinks water meters are a “tax” or electricity meters, but applying a price, that varies by time-of-day, and is periodically reviewed as to user demand (as in Singapore), is not very much like a tax. In Sweden, congestion pricing is called the “congestion tax” for legal reasons, in Singapore the term “Electronic Road Pricing” is used to describe simply a fee for using the roads. Does he see bus fares as a tax? Does he see the existing toll roads in NZ as a tax? This is hardly a major point, but it sets the tone for this article, which is a not particularly coherent piece, sometimes opposing road pricing and in one place saying "it has a role".
Although he admits that congestion pricing works, he then makes several claims that do not stand up to scrutiny, namely:
• They can “do a lot of harm”;
• They are “not the key to reducing congestion”.
He also says they are not popular, which is hardly a surprise, as reports from The Congestion Question (the last major study into the topic from 2016-2020) indicated that public acceptability is the greatest challenge to implementing congestion pricing. Wilson’s column is of course helping to add to this challenge. I don't think you should complain about something being unpopular by contributing to its unpopularity sans the merits.
What about "do a lot of harm”? He doesn’t elaborate, and in fact provides zero evidence of a "lot of harm" anywhere, so why say it? Why scaremonger?
He then acknowledges that for commercial traffic, congestion is a cost, whether for freight delivery or simply providing services that require getting between sites. However, he then describes Stockholm, London and Singapore as all being cordon schemes, which isn’t quite accurate. Although he cites The Congestion Question report, he clearly did not read the report on international experience (PDF) (disclaimer: I wrote that with colleagues of mine).
Let's be clear, Singapore is predominantly a corridor scheme (with two small cordons), with most charging points on major roads and arterial routes approaching the downtown. Stockholm is a cordon (PDF), but also now has a corridor charge for the Essingeleden motorway that passes through the city. London is strictly an area charge (it charges circulation within the cordon as well as crossing it).
Wilson mentions this because he prefers cordons it seems but sees corridor charging (which the Mayor of Auckland did propose last year) as being flawed because they are easy to avoid by rat-running on local roads. That’s true, if you don’t put in place measures to price that rat-running (e.g. by pricing exiting and then re-entering a road to avoid a priced point).
This appears to be a very weak attempt to condemn road pricing schemes that aren't cordons, but the Government's policy is not that there should not be cordons, or that there should be any specific type of congestion pricing scheme at all.
Of course, there has been no decision at all about what proposal to introduce in Auckland, but the Congestion Question did recommend a downtown cordon supplemented by corridor charges, on the most congested routes on the Isthmus and towards the North Shore first. More work has to be done on what the first scheme would look like. So it seems rather premature to be antagonistic to the very concept as a whole at this stage.
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| The Congestion Question indicative downtown cordon |
His next point is to appear to be critical of the timeframe, as he claims the first scheme would not be in place until 2028. This seems pessimistic. Sure the legislation and approvals will not be finished until 2025, but it is entirely plausible for a scheme to be operational within two years of that. He indicates that the timing of elections (local in 2025, national in 2026) is driving this, but it’s unclear that this could be accelerated to be significantly faster. He says it should be operational when the City Rail Link opens, which I agree, but it seems unlikely that even if approved today, that a scheme could be operational in 18 months. Yet surely if that is the best time, the second best time is as soon as possible afterwards?
Then Wilson goes back to how unpopular it would be. He claims it is a “regressive tax”, yet I don’t recall him calling the introduction of the Auckland Regional Fuel Tax that, even though there is a study that explicitly concluded that (PDF). The fuel tax applied 12.5c/l on petrol and diesel sold in Auckland, and of course meant everyone driving paid it, except those able to afford an EV or hybrid vehicle. Wilson did support the regional fuel tax when it was introduced, and he said “It does hurt the poor disproportionately …. But it also targets almost everyone who's clogging up the roads”.
That’s nonsense. It targeted nobody. He also said “one day we’ll have better ways to manage demand” saying essentially road pricing would be that but “we don't have the technology in place to do that yet and it's controversial”. The regional fuel tax was not introduced as a demand management tool, but moreover the technology to do road pricing exists now.
Now the government is now advancing it, and he opposes it, not because of the unavailability of technology. Of course the regional fuel tax is now history, but that measure improving the cost of living for most Aucklanders is unnoticed, because this is a polemic.
He gives no evidence for road pricing being particularly regressive, although as a concept it is no more “regressive” than pricing water, electricity or indeed public transport or food. As part of developing proposals for Ministerial approval, an impact analysis of the proposed “time of use” pricing scheme will need to be undertaken. Perhaps Wilson could focus on what that analysis should look like, rather than dismissing the whole idea of pricing as regressive. Now the Gothenburg congestion tax IS regressive, there is evidence of this (PDF), but it was a scheme set up to raise revenue and is far larger in scope than the scheme that would have been needed to relieve congestion. The NZ Government is proposing time of use pricing specifically to improve network productivity, not to raise revenue, but Wilson ignores that, as it doesn't fit his polemic. Of course congestion is regressive, as the richest don't commute at peak times or can buy homes close to work.
He claims “It’s not the key to solving congestion. And one of the most common arguments for it is economic gibberish”. This is rather embarrassing. If you don’t understand an economic argument then the best way of understanding it is not to call it gibberish, in fact it displays astonishing ignorance. His understanding of the value of time and the economic impacts of congestion is poor indeed.
He claims “These charges will be a cost of doing business that companies will pass on to their customers. For the general public, they will raise the cost of living”. Will they? Having claimed correctly that less congestion will make all sorts of businesses more productive, whether it be for freight deliveries or services such as the building trades, they will be able to undertake more jobs for the same cost (wasting less time and fuel). Pretty much all benefit/cost analysis indicates businesses save much more than congestion pricing costs, so it would not be passed onto customers. Of course congestion costs are passed on.
It's his next claim that is the most embarrassing.
Alan McDonald from the Employers and Manufacturers Association (EMA) has said much the same. “Recent traffic monitoring data has found that Aucklanders are losing 22 million hours per year out of their lives while they sit in traffic,” he declared. “That equates to a $1.3 billion annual hit to GPD.”
Gibberish. You can’t link private travel to productivity because very few people drive to work on company time. However long your commute takes, it’s your own time you’re wasting.
Everyone resents it, and fair enough. But the economic value – the “annual hit to the GDP” – is zero.
Wilson claims that the economic cost of congestion to private individuals is zero. He claims this doesn’t impact on GDP. Let’s set aside the obvious social cost. Congestion means commuters leave home earlier and get home later than they would otherwise. That’s less time with family, less personal time, less time to cook, to exercise, to sleep even. Wilson understands what externalities are, I think, so he could at least acknowledge that. However, what he misses out is what congestion does to opportunities for individuals.
You see the available job pool for most people is directly related to the duration of commute from wherever they live to wherever jobs are located. Most people are happy to commute for up to half an hour, and many in a larger city for up to an hour, although those with children to look after are more challenged. Beyond an hour those able to spare that amount to time to travel to and from work are much more limited in number. In short, congestion reduces the opportunities people have to increase their incomes with better employment, and it also reduces the labour pool available to employers to improve their productivity. I’m always a little sceptical of the methodologies used to “cost” congestion, but to dismiss traffic congestion as not imposing costs on GDP as it applies to private individuals is ignorant. There is literature to back this up.
Wilson then determines that the answer isn’t road pricing, but more rapid transit. Yet he doesn’t seem to be able to explain why cities like Paris, Amsterdam, Tokyo, New York, Sydney or San Francisco all have chronic congestion WITH lots of rapid transit? The Northern Busway is a great piece of infrastructure, but it hasn’t fixed congestion on the Northern Motorway, although it has absorbed a lot of demand growth. Buses do carry a lot of people over the Auckland Harbour Bridge, but the idea that this is a substitute for road pricing is simply absurd. He may as well say that you don’t need parking fees if there are free buses. It’s completely false to equate the impacts of the Congestion Question, which was a network wide reduction in congestion, from the effects of the Busway on one corridor. He claims rapid transit reduces emissions. This only happens if it enables modal shift from driving cars, which of course congestion pricing promotes as well (bearing in mind transport emission in NZ are capped with the Emissions Trading Scheme anyway).
The article explains all of the benefits from a lot of public transport, without even really noting that the costs of all of this infrastructure he wants need to be paid for, and one way of doing it would be through congestion pricing. That doesn’t mean I think that’s how the money should be spent, but surely that connection could be made? Furthermore, all of the rapid transit he touts does absolutely nothing for freight or tradies or other commercial traffic, as they can’t use it.
He then makes this remarkable failure to connect thoughts:
Our roads are appallingly congested, we are failing to reduce carbon emissions and our road safety record is among the worst in the developed world. The opportunity is for a rethink about how and why we use the roads, so we can build ourselves a more functional, friendlier city. Instead, the Government proposes a new tax.
He claims “a great many people will not be able to avoid a congestion tax”. How does he know? If it is a downtown cordon, where only 13% of employment is based and half of commuters already travel by public transport or active modes then hardly anyone will be affected. Even if it is just the Mayor’s two corridors, that wont affect most commuters either. Again, this is just nonsense.
If Simon Wilson can’t see the link between road pricing, reducing congestion and emissions, and making a city more functional and friendly, then he is either ignorant or deliberately disingenuous. I fear he is simply a polemicist seeking a headline and he can’t give any credit to a politician he doesn’t like or support for implementing a policy that does more for what he wants than any other single measure at the lowest cost.
Opposing the very concept of time-of-use road pricing at this critical stage indicates he is not really interested in enabling all of the potential tools to reduce congestion, lower demand for emissions and encourage modal shift at all, but rather is just writing polemics for headlines.
Wilson would be better placed to focus not on opposing the first government in NZ’s history to advance road pricing to implementation, but rather to focus on the design of the first scheme proposal for Auckland, to ensure it has a positive impact on reducing congestion, minimal impact on those with low incomes and limited choice, and to encourage creative solutions, such as those used elsewhere, to address any issues. If he wants a cordon, then talk about it. If he wants a different option, then fine. However, if he doesn’t know anything much about the topic at all, he might prefer to read a bit more, talk to people who do and not try to undermine a policy that actually has general support across the political spectrum from the Greens on the hard-left to ACT on the classically-liberal right.
Time-of-use pricing could help Auckland look much more like what Simon Wilson wants it to, it’s just a shame he wants to get in its way, on grounds that are spurious and almost entirely baseless.
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| The Congestion Question evaluation of impacts |
