The "war on cars is winnable" doesn't need to be "a war"

An interesting, but lengthy article by Carlin Carr on a Scroll.In website puts forward the case for how cities can avoid being heavily congested by cars, and makes some valid points.

For Japan, yes here is a country with dense rail transport, albeit much in dense cities where such rail is profitable.  This has meant that rail travel is very normal for residents in major cities and between cities, bearing in mind distances between many of the major cities are not large, lending themselves well to fast rail travel.

What missing about the analysis around Japan is two key factors. The ruling Liberal Democratic Party (which literally monopolised government in Japan until the 1990s) has always been closely aligned to the construction industry, which was largely relaxed as to whether vast amounts of money were poured in roads, railways or airports.  In truth, Japan has overbuilt much of its infrastructure, with there being more than enough road and railway capacity outside metropolitan areas.  While the original Shinkansen lines have demonstrated positive economic results, more recent lines have not, as they simply reflect a belief that building infrastructure is good in itself.  It isn't, and Japan is, in part, paying for this now, with public debt in excess of 200% of GDP, and a stagnant economy.  It's worth noting Japan's railway system is privatised, and has always has an element of competition even before that.  The second point is alluded to in that all major national highways are tolled, and urban routes may also be tolled, but the national highway network is Japan is privately owned (under a PPP lease).  As such, the roads are managed commercially and tolls set to recover maintenance costs and the cost of the lease of the assets, so tolls have to cover costs and generate a return.  Yes the shaken (regular safety inspection and tax) does incentivise lower levels of car ownership, but it also incentivises rapid turnover of the fleet, with old vehicles not remaining in the fleet in large numbers because of the costs of them meeting safety and emissions standards.

Singapore remains the world's most sophisticated example of urban road pricing.  No other city charges by route, direction of travel and time of day with differential pricing based on congestion, and it works very well.  Yet many will point out that Singapore has specific characteristics that make it special.  One is that housing density is high, as a city-state, it is easy to develop the densities of travel that make public transport viable.  Singapore's metro, for example, does not require subsidies for operation and renewals.  Secondly, is that Singapore has a combination of a highly credible judicial system and public bodies for enforcement, and a culture of compliance that means it is easier to implement such a radical solution in the city-state. 

As far as solutions are concerned, there is plenty of merit in developing cities in countries like China and India providing heavily for pedestrians and cyclists, so that these options for short trips remain preferred, and then to focus on enforcing parking laws and in rationing parking by price.  Beyond that, regardless of whatever planning options are chosen, the future for rationing road space belongs to road pricing.

Of course, to do that requires some key elements to be in place, which includes the ability to robustly track down violators and to enforce violations meaningfully, which isn't always possible in countries where number plates and databases of owner records are haphazard.

However, my main point is that it shouldn't be seen as a "war" on cars.  Cars have a role in cities, it is just about how cities ration precious road space so they pay for it appropriately.  Of course not everyone can use their car at the same time, it's not physically possible and when they try, it creates negative externalities for others.

Rationing road space rationally!

Yet, if you pay to park and pay to use the roads, at a price that ensures an efficient flow of traffic, then it should be fine to use your car.  Disabled motorists might be given preferences or discounts to recognise that alternatives for them may not be viable, but overall the roads can be managed so that, like other scarce resources, their use gets rationed by price.  

The first step to doing this is to ration road use by basic enforcement of requirements around safety - that drivers have licences, that vehicles are safe to be on the roads, and for regular violators of safety related laws to lose licences.  It requires that parking laws be enforced where they interfere with road safety and capacity, but after that a rational approach to rationing road space used for parking and loading should be considered.  Charging for access, time limiting access for loading, setting aside spots for disabled vehicles and bus stops, all of these sound basic to those with well developed highway rules, but need to be the first approach for many developing countries.

Intelligent technology makes dynamic parking charges all the more possible, and from then we go to pricing.  Whether it be tight city centres, or major new capacity, or charging cordons, zones or by distance, it can be introduced in steps, and what it is about, is not just thinking about mode choice but route choice and time of day choice,

No planner can second guess the best option for anyone on a particular trip whether it be for themselves, family or for goods, but by pricing roads and parking rationally, these choices can appear, and can come from either using roads differently, or using other modes.

It's not about a war, it's about applying a rational approach to rationing a scarce economic resource, 

Vehicle ownership tax mooted for California

Like many US states, California too has issues around raising sufficient funding to pay for highway maintenance and construction.  UT San Diego reports that Toni Atkins, Speaker of the California State Assembly has proposed, in essence, a motor vehicle ownership tax at US$52 per annum.  She suggests it could be higher for trucks (based on weight) and electric vehicles (because they don't pay fuel taxes), but would be hypothecated to transport funding. 

Arguably this is an efficient way of recovering at least part of the fixed costs of the highway network, which by some measures accounts for an average of half of all network maintenance costs.  This is the network degradation due to the effects of radiation from the sun, rain and changes in temperature. 

Charging all vehicles a "network access charge" isn't a bad idea in that context, and it parallels similar taxes in other jurisdictions.  In the UK it is called Vehicle Excise Duty, and is related to vehicle weight and CO2 emissions, although none of the money raised is dedicated to spending on transport, it can cost a vehicle owner anything from nothing (for low emission vehicles) to US$1676 for the highest emission vehicles (full schedule here).

In Australia, vehicle registration fees are set by states, with heavy vehicle rates set them to offset the undercharging inherent in charging diesel tax (as the heaviest vehicles do not pay enough diesel tax to reflect the damage they cause).  For example, in the state of Western Australia an average car will cost US$167 to register.  By contrast, the heaviest truck combination will cost US$7551 a year to register.  That incentives high utilisation and also incentivises vehicle fleet owners to buy vehicles that are suited for what they want to do, and not to purchase those that are too big.  

However, such charges have some fundamental weaknesses, most notably that they reward those who use the network the most, and in the absence of charges for congestion or by location, it is a blunt mechanism.  It also can incentivise evasion, as some will choose to supply false details for registration or register in neighbouring jurisdictions to avoid higher charges.  

A better option for fixed charging operates in some European countries in the form of "vignettes", whereby an access charge is set for using just motorways and major highways.  It means that the stereotypical "little old lady" who only drives around town doesn't get hit, but heavy commercial users and most others do.  For countries and states where driving off of major highways is a huge inconvenience, it works.  It's worth noting that it is primarily applied in Europe as a way of also capturing foreigners using national highway networks.  The access charge itself is time based, so that you can buy a vignette for as long as a year, or as short as four days.

However, revenue only grows as vehicle fleet numbers grow, not traffic.  So it can never replace other means of charging, only supplement them, and even then for it to fully recover fixed costs it would have to be at levels that would incentivise too much evasion to be desirable.

In my view, whilst there are sound reasons why such charges could be turned to in the past, today it is more questionable as to whether they should be introduced now beyond simply recovering the administrative cost of operating the vehicle registration database.   However, it is still a closer link to road use than any talk of a sales tax on everything everyone buys, to subsidise roads.

Far better will be to charge for the use of the roads, by distance and eventually location, weight and time of day.  That's both economically efficient and equitable, the question is how to get there.

News shorts: Vancouver, Washington State

Vancouver debates a sales tax to pay for transport

Although evidence and professional opinions would suggest that road pricing is the best way forward for Vancouver, it is instead going to hold a referendum on a sales tax that will be hypothecated to pay (primarily) for more public transport.  The tax will be 0.5% on all sales.  The North Shore news reports  that the tax will raise C$250m (US$201m) per annum, at a cost of between C$125 and C$250 per household, depending on which side of the argument you believe.  Of course that includes households that wont use any of the proposed transport projects and those who will use it everyday.  Equity and economic efficiency are thrown out of the door in the quest to raise tax revenue.

Hypothecated general taxes for transport are no more intelligent than such a tax for health or for subsidising farms.  However, it is a question of what can be done politically and legislatively, versus economic rationale.

A better approach would be at least some increase in taxes on owning and operating vehicles, a more rational appraisal of where benefits lie with some of the projects (and then charging accordingly) and looking at expanding tolling.  It is always unclear quite why everyone should pay regardless of their use of the transport network or the benefits they obtain (whether they be users, property owners or businesses).

Ballots will be sent out March 16, and votes must be in by May 29, 2015.  It's none of my business, but I'm hoping for a no.  Sales taxes are very poor ways of raising money for specific purposes, and it is telling that advocates of it clearly don't think they could convince the users of the new infrastructure to contribute much of the capital cost.

Washington state consulting on higher HOV thresholds for HOT lanes

According to the Bothell/Kenmore Reporter, the Washington State Transportation Commission in consulting on tightening up the eligibility for vehicles to use the I-405 HOT lanes that are currently under construction.  The idea being that high-occupancy vehicles (HOVs) will need three occupants to use the new lanes untolled.  This is inconsistent with the current approach to such lanes in the state, whereby two occupants are sufficient. 

I wrote about these lanes before, questioning their financial viability, but now it seems like this move is designed to partially address this.  However, the report indicates that having a three occupant HOV threshold is needed to cover operating costs, re-emphasising my point that new capacity HOT lanes invariably are a form of subsidised new capacity.  Those paying to use the lanes are not paying the capital costs of the capacity, but paying as a market mechanism to manage demand.  That's positive in terms of ensuring a high quality of service (and bearing in mind that users of parallel untolled lanes benefit from the transfer of traffic onto the new lanes), but it is not a solution for funding new capacity.  It appears that the key goal is meet the federal and state guidelines of maintaining a 45mph average speed, and it is more fair to target the HOV users, rather than hiking the tolls.

In terms of pricing the report says:

The recommended average toll for the express lanes will be between 75 cents and $4 at the start of the tolling system. More congested days would fall between $4 and $10, the latter being the maximum and expected only 10 percent of travel days. Seventy-seven percent of trips are expected to be below $1, according to the WSDOT.

As I've said before, I see value in converting underutilised HOV lanes to HOT lanes, and even in considering whether new lanes should be toll lanes.  However, as HOT lanes you leave some users benefiting whilst paying nothing more for vastly improved levels of service.  It is more equitable and financially prudent to simply build them as toll lanes.

Minnesota seeks to ban public funding of studies into road pricing

A Bill has been presented to the state House of Representatives (HF389) that would effectively stop taxpayer funding of state institutions investigating distance based road pricing.  It specifically states that:

The University of Minnesota and the Board of Trustees of the Minnesota State Colleges and Universities shall not utilize state funds or resources, including but not limited to appropriations and funds provided under subdivision 1, to:

 study, test, demonstrate, evaluate, or promote a potential mileage-based user fee, or to contract for the performance of these prohibited activities; or

provide funds including membership dues to any organization regularly engaging in research or advocacy concerning mileage-based user fees, including but not limited to the Mileage-Based User Fee Alliance.

Minnesota Public Radio notes that the Bill was proposed by Republican Rep. Bob Barrett of Lindstrom.   Barrett also opposes a proposed increase in fuel tax.  His solution is that the Motor Vehicle Sales Tax be amended so that more than 60% of the revenue raised can be spent on roads.  I'd question why a sales tax on vehicles should be used for any transport funding at all, since the purchase of a vehicle bears no relationship to its usage (and you can buy vehicles out of state).   Better to scrap such a tax (making it easier to buy newer, safer and more fuel efficient/less polluting vehicles) and charge for usage of the roads.

Whilst I understand Barrett's opposition to higher taxes, the opposition to studying changes to taxation seems strange.   Is it just because he opposes the policy of charging for road use that he doesn't want taxpayer money spent on studying it?  If he opposes the use of taxpayer money for any studies into transport policy, then that would be a wider matter.  Legislating to micro-manage such spending seems counter-intuitive for someone who advocates a smaller role for government.

Long standing advocate for distance based pricing, Lee Munich, writes in the Minnesota Star Tribune against the Bill.  

The case for studying distance based pricing is clear as he says:

This approach is being seriously studied by many states across the nation for a very good reason: As the nation’s vehicle fleet becomes more fuel-efficient, and more apt to be using non-gasoline energy sources, the revenue raised by the gas tax decreases. When less gas tax revenue is raised, we don’t have enough money to keep roads and bridges safe and efficient. When that happens, people and economies suffer. And the system becomes more inequitable, as some drivers don’t pay their fair share of road costs based on their use of the road system.

For this reason, California, Oregon and Washington are all developing large-scale pilots to test mileage-based fees on the roads. Many other states are launching studies to explore these fees as a long-term alternative to replace the gas tax.

The Bill has been referred to the State Committee on Higher Education Policy and Finance.  I don't know what chances there are of this making law, but I would hope it doesn't.  A lot of work has been done in Minnesota looking at various dimensions of distance based road pricing, and there are plenty of issues worth working through, but throwing the idea away and sticking to a sales tax to pay for roads is simply economic nonsense.

Imagine paying a sales tax on buying a new mobile phone to pay for your network, or paying a sales tax on appliances to pay for electricity.  It would make much more sense to scrap the sales tax, replace it with an increase in fuel tax (for the last time) and transition towards users pays.

Footnote:  Yes I am back, and writing more regularly now

2015 ahead

First to my readers, apologies.

2014 was a tough year personally with bereavement and family illness, and so it was difficult to dedicate the time and energy needed for this blog. Given this blog is a voluntary effort, and between family and work, I simply didn't want to spend the time required sitting in front of a screen to write about these issues as frequently as I would have wanted.

Quite a bit happened in 2014, with there being little let up in the growth of road pricing internationally, whether it be the opening of more toll roads in many countries, the addition/conversion of more HOT/toll lanes in the US (it is worth thinking why this is only happening in the US), and the incremental growth of network based charging in a few countries in Europe.  Meanwhile, interest in charging for driving in cities to address congestion and pollution continues to grow, with Asia being the new frontier.  While Jakarta has had some delays in progressing development of road pricing, Chinese cities are looking at such options.

At a high level it is worth noting what the big trends are, and I hope to write more regularly and look forward to any comments you may have.

Dartford Crossing goes electronic free flow, but tolling politics still poorly handled

On 30 November 2014, manual tolling finally ended at the Dartford Crossing - the 4 lanes each way tunnel/bridge crossing of the Thames that connects the eastern ends of the M25 ring motorway around London.  Already the southbound toll booths that lead down from the QE2 bridge have been removed as is seen here in FleetNews, with the northbound ones to be removed in coming months

Dartford Crossing toll plazas at the southern side of the tunnels/bridge

The system that has been introduced is an electronic free flow system that relies on automatic number plate recognition, and requires all motorists using the crossing to either:

- Set up a pre-pay account that deducts the toll every time the vehicle crosses a tolling point;

- Make one-off payment via phone, online, retail outlet or by post no later than midnight the day after the crossing is made.

Of course, while the tolling has been automated, the booths have yet to be removed, which caused some chaos on the first day as many motorists stopped to try to pay for a toll at empty booths with barriers raised.  The problem being that, on weekends, most users are not regular enough to be aware in advance of the change.  I suspect also that there will be a deluge of penalty notices that might be sent out, although I suspect the operator would be wise to not send out any such notices for the first day, and subsequently focus enforcement on any repeat violators.

With full removal of the toll booths, there should be a significant improvement in the quality of service of the road, with congestion of 7-11 minutes on average being largely relieved. 

Tailbacks northbound at Dartford Crossing toll plaza should be no more

However, as I wrote a couple of years ago, the policy around the road remains a public relations disaster.

Why?

Because with congestion relieved, the toll prices are being increased by 20% (although there is a 13% discount for those with accounts) and there is no indication about what the money raised is for.  It is, in essence, being treated as a tax, or more accurately, as one of the government's most profitable ventures.

Dartford Crossing toll prices with discount for account holders

Although it is legally a congestion charge, the toll does not vary at peak times, or by direction (even though there is a reasonable case for doing this), although it does not operate for 8 hours a day (overnight) to encourage heavy commercial traffic in particular to use the M25 at night.

France's nationwide truck toll on hold indefinitely

Back in July, I noted that the long awaited Ecotax, heavy vehicle road charging system for France, was on hold, because of politics.

A new plan was developed to only toll 4000km of roads, not the 15000km originally envisaged, with the emphasis being on only charging motorways and major highways with parallel tolled motorways, and also on handing a political gift to Brittany, where opposition to the toll was greatest.

The problem in Brittany was that the French Government's efforts to convince people, or more specifically, truck owners and operators, that paying by distance is fair, didn't wash with those in far off parts of France.  They figured the toll was "unfair" because they "had" to use longer stretches of road.  Quite why others should pay for them to have roads they use because of where they choose to locate themselves wasn't clear, but then France has multiple layers of accretive subsidies, and anyone who dares challenge this simply meets protest.

In July, it was envisaged that the toll system would start operation on 1 February 2015, but not any more.  

According to The Local,  the toll has been shelved, indefinitely.  It appears that the deep unpopularity of the Socialist Francois Hollande government has put pressure on this project, which ironically had been approved under the Sarkozy government. 

Ecology Minister (and former leader of the Socialist Party) Ségoléne Royal announced the government would not be introducing the tax.  The rightwing opposition said it showed that there was "no government" because of constant "zigzagging".  The EELV (green) party said the decision was "disastrous" showed "lack of courage", claiming it would cost the government €450 million in lost net revenues per year (it is closer to €550 million).  

Reasons given for the suspension were:

- Difficulties of implementation (which is simple nonsense, as it was never an issue technically, rather politically);

- Concerns about costing jobs in the haulage industry.

The government instead decided to tax more heavily the multiple companies that own France's privatised toll motorway system, although it is not clear how this also wont cost jobs in the haulage industry, or it simply will mean more traffic on the untolled government owned roads as tolls increase.

The consortium contracted to implement the system will now seek many millions of Euros in compensation for the termination of contract.

What could have been done?

I'm tempted to think that rather than scrap the scheme, efforts could have been made to reduce other taxes on the haulage sector in exchange for the Ecotax.  Reducing taxes on licensing/registration of liable vehicles would have helped, and be more efficient transferring such costs from the ownership of a vehicle to usage.  However, a more complex option would have been to offer a refund mechanism that included refunding part of the diesel tax.  This would have had to be done to generate some revenue to make it worthwhile, but at least by cutting other taxes there would be a chance to gain some consent for the project.

Unfortunately, it looked like a chance to just increase taxes on one sector, without little publicity about the roads that would get fixed by the project.  Quite simply, there needed to a proposition to road users to support it (bear in mind it was only for trucks), making it just a new charge with little in return is not going to be popular.

It's a shame, because France does have a problem of heavy use of untolled motorways, but the right solution needs to be about striking a deal with those paying, that the money generated goes into the networks being tolled and that another tax is cut in return.

Unfortunately, that isn't going to happen.

Will Dallas have the world's largest HOT lane network?

Dallas News reports on plans from the North Texas Tollway Authority, North Central Texas Council of Governments and Texas DoT to embark on a major expansion of tolling in the city.  This includes not only including tolls on all major new projects, but retrofitting HOT lanes on existing highways and converting HOV lanes to HOT lanes where feasible.

The report includes a map depicting an extensive network of future toll lanes (which I suspect means HOT lanes) which will mean the city will possibly have the largest such network of any such city in the world.

DallasNews map of current and proposed tolling network

The article cites the existing toll lane network as including:

- LBJ Freeway (map here)

- DFW Connector

Planned toll lanes:

- IH 35E through Denton County

- IH 30W of downtown Dallas

- SH114

- SH183

HOV lanes replaced with HOT lanes:

- Central Expressway

- I-30 east of downtown

- I-35E south of downtown

- US highway 67

The lanes are expected to enable traffic to be managed during major sporting events or catastrophes, as they can serve as emergency vehicle lanes in such conditions.  

 Michael Morris, transportation director for the North Central Texas Council of Governments talked of the problems with a 1985 air crash at DFW “In that case, it was difficult for all of the ambulances and firetrucks to get where they needed to go”.

Opposition comes from politicians in Collin County, which opposes converting HOV lanes to HOT lanes, largely because of a belief that there are enough tolled routes in the county.

What's telling about this report is how pervasive and extensive the proposed network will be.  It will mean that for perhaps the majority of Dallas motorists, the option of paying to use a lane will be the norm for their trips.  

My views on HOT lanes are based on considering the total economic and financial costs and benefits:

- Converting an underutilised HOV lane to a HOT lane increases utility, raises revenue, significantly reduces congestion for its users, and marginally reduces congestion for non-HOT lane users, so it is likely to be beneficial.

- Building a new HOT lane is almost always never going to be financially viable, because the capital costs of the additional lane are unlikely to be recovered from the peak users. A pure toll lane may be marginally more likely to be viable, but again it will only be where congestion is chronically bad that sufficient users will be prepared to pay enough to pay for the extra capacity.

- Toll lanes are likely to be more beneficial than HOV lanes, as HOV lanes tend to provide free benefits to couples travelling together as much as incentivising car pooling.  Far better to ration by price than rewarding chance.

- In the longer term, their value is in demonstrating what pricing can deliver, but if they are not financially viable it means a better solution is to price the whole network, appropriately, which includes looking at the role of fuel taxes.

France's Ecotax distance based truck toll to be scaled back

As has been previously reported, the French Government had been committed to implementing a distance/size based heavy goods vehicle charge on all national highways (this excludes the extensive private and public corporation owned toll motorway network), using GPS technology, called Ecotax.  As the name suggested, it was sold on the basis of improving the environment, but was driven by a desire for net revenues from foreign trucks and to rebalance the use of the highway network, by reducing the attractiveness of the untolled national highways that often run parallel (although longer distances) to the tolled motorway network.

The politics behind the concept came under fire late 2013, as the Hollande Government (the laws and contracts for the system having been committed under the previous Sarkozy Government) faced protests on the eve of the system's introduction.   The main complaints being from the trucking sector, opposing additional charges, and businesses in some more distant parts of France, notably Brittany, which have argued it is discriminatory because they are "further away" from other parts of the country.

The calls from the trucking sector for opposing "more tax" are understandable, given no other taxes are being reduced to offset the Ecotax (although the French Government is keen to reduce the budget deficit, given it has not run a budgetary surplus for 40 years and public debt levels are becoming a significant burden).   However, to complain about paying by distance when you locate your business far away from suppliers or customers is almost comedic.  Yes you will pay more, but you use more roads that need maintaining and renewing.  Quite why choosing to live far away from where you want to go, or get things from should be cross-subsidised by others, seems curious.

So the scheme was shelved, until now.

Smaller scale truck toll

So on 23 June it was announced that the Ecotax is to proceed, but on a smaller scale and simply be called a "truck toll".   According to Reuters, Prime Minister Manuel Valls said the new scheme would focus on the roads with the heaviest traffic and will generate 550 million Euros (US$748m) per annum, less than half of the 1.24 billion Euros (US$1.69b) previously forecast. 

It will start on 1 January 2015, following a three month testing period (and changes to the law and no doubt contracts with the suppliers). 

What has been lost?

The network to be tolled is now only 4,000 km long, compared to the 15,000 km that was going to be tolled before (comprising 10,000 km of national highways and 5,000 km of secondary routes that would have been severely affected).  That is a significant reduction in scale, and is seen by comparing the maps of the original scheme and the new one below:

Original planned Ecotax network

Ecotax network from 1 January 2015

Very few highways to the west and the south are now to be tolled, with the emphasis being entirely on state highways which have parallel tolled highways and heavy volumes of traffic.  It's a significant compromise.   Part of this is that all but one road in Brittany is exempt.  In other words, protest in France and politicians cave in.

The Local reports further changes.  It says the charge levels could be 0.13 Euro per km, whereas before the range was from 0.025-0.20 Euro per km.  

Circus, agricultural and milk collection vehicles will be exempt.  The circus example is obviously some minor cultural exemption for little reason that lobbying, but the agricultural lobby, which is a long standing campaigner for some of the most generous subsidies in the world, has won again.   Agricultural equipment being relocated short distances is one thing, it is another for a whole new category of freight vehicles to be exempt, for no other reason than the politics behind expecting one of France's most mollycoddled sectors to be treated like everyone else. 

Still it is significant to introduce it in the first place, and it makes sense in itself, although the argument that other taxes could have been reduced to offset it is a valid one.  Diesel tax in France is 0.44 Euro per litre (US$2.26 per gallon), although EU law sets a floor that would only allow a reduction of around 17%, and the French Government is desperate for more tax revenue, rather than rebalancing the tax system (and reducing tax on diesel would benefit cars with no new toll for them).

The net revenues are said to be dedicated to new urban public transport projects, which of course doesn't have a direct relationship with trucks on intercity highways, but is better than just adding money to general funds.  Of course, not spending the money on roads is a good way of generating opposition.

What isn't clear is how it affects the contract with supplier Atlantia, which will still seek payment for services, from a smaller revenue pool.  It will add to the net costs of the system relative to revenue.

I previously reported the costs as follows:

 - 250 million Euro (US$306 million) per annum consists of operating costs.

- The remainder will be to recover the 600 million Euro (US$735 million) capital costs over the period of the concession, which is 11.5 years.

Those operating costs will not drop by 60% just because the revenue does, I suspect more like 30%, and the capital costs will change little given much of them have been incurred.  So it may come to pass that 40-45% of the revenue generated will be spent on the costs of the system, rather than 20-25%.  That hardly looks like a great deal for anyone paying.

What this doesn't mean

It doesn't mean the technology doesn't work.  It doesn't mean that it isn't a good idea.  

What it does mean is that the biggest problem is the politics of adding a new charge on top of an industry that faces taxes for owning trucks and high fuel taxes.  

Moreover, it does mean that unless you have the politics addressed and have the determination to go through with it, you'll face losses of revenue in backtracking, and it can result in compromises that unfairly target some less vocal groups against the more vocal (and indeed violent). 

The result, will be more traffic on tolled highways, a little less on the newly tolled state highways, and a little revenue for the state, and probably a modest reduction in environmental impact.

What it needs is a more convincing story around where the money will be spent, the rates the charges are set at, and in having some offsetting reduction of other taxes, what it is now is a smaller scale political fudge.

Heathrow Airport congestion charge

As part of aviation policy, the UK government set up an independent commission to examine the need for additional UK airport capacity and recommend to government how this can be met in the short, medium and long term.

Whilst I don't want to go into details about that process (the website for the Commission is here) what has come out of it so far is that a shortlist of options have been selected by the Commission for more detailed work.  One of them is construction of a third runway at Heathrow Airport, and within that proposal is a surface access proposition that includes a congestion charge for road traffic accessing the airport.  

Heathrow Airport Limited has produced its own documentation about its proposal on this website with downloads available here.   Media comment has been on the BBC and Daily Telegraph among other media outlets.

I'm not going to comment on the proposal at all here, as my sole interest in placing it on this blog is for the interest of readers regarding road pricing, and because I am myself undertaking work for the Airports Commission.  As such I am neither expressing a view about the proposal for a congestion charge, nor any of the airport expansion proposals (which for the purposes of completeness include proposals from Gatwick Airport Limited and Heathrow Hub, with a separate investigation into the idea of a new Thames Estuary Airport).  Heathrow's proposal is the only one so far to refer to road pricing and is mentioned as a post-2040 implementation.  Certainly I don't believe there are any such charges applied at airports elsewhere in the world, although parking charges may sometimes be used to partially address this.

Key statements regarding the charge are as follows, from Volume 1 of the submission (PDF):

Beyond 2030, once our comprehensive network of public transport services is in place, we believe there is a case for introducing a new congestion charge zone to further reduce vehicle journeys to Heathrow. Revenues could be ring-fenced to fund major rail, London Underground and road infrastructure improvements. It could also be used to fund sustainable travel initiatives, public transport service improvements and local community projects. If expansion were to proceed we would work with local people and relevant authorities to define how such a zone would be applied. These public transport improvements will enable Heathrow to deliver more flights, without increasing airport related traffic on the road.

We believe there may be a case for introducing a congestion charge zone at Heathrow, once public transport improvements are in place. This would provide an opportunity to manage airport traffic levels and emissions by charging those with the biggest impact. We would wish to consult on many issues to ensure any such proposal is appropriate and fair, such as exemptions that could be offered to blue badge holders, low emission vehicles, local residents and licensed taxis. A charging zone will provide an opportunity to ring-fence revenue (in the form of an enhanced ‘Super’ Public Transport Levy fund). This could be used to support funding of major surface access schemes, and to fund sustainable transport projects in the wider area to benefit local communities.

Certainly this is one option to address traffic congestion at major airports.  The final report of the Airports Commission will not be released until mid 2015, which is expected to recommend a preferred airport expansion option.  It is not clear whether that will include any comment on the congestion charge element of the Heathrow proposal, whether or not Heathrow's airport expansion proposal is recommended by the Commission for adoption by government.