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We can pay for better, safer, more reliable roads…

…in a way that is fair to road users and good for the economy and the environment

Readers of this article may recognise a slightly rephrased version of the Wolfson Prize question (Wolfson 2017). The key word in the Prize Question is “pay”. The answer is road pricing (“pay as you go road user charging”); it can support better, safer, more reliable roads, be fair to drivers, and good for the economy and environment. In this article we show how to achieve it.

The problems in road use:
The problems related to road use include:

  • Roads are congested, especially at certain times and locations (urban rush hours, motorways at Bank Holidays, “pinch-points” on the network), creating estimated annual costs to the UK economy of £13 billion in 2013 and £21 billion by 2030 (Inrix 2014).
  • Air pollution, especially NOx and particulates, mainly due to road traffic, is estimated to cause 40,000 premature UK deaths per year (BBC 2017) – over 20 times the 1,732 reported road deaths in 2015 (DfT 2016a). CO2 emissions contribute to global warming (DfT 2015).
  • Revenues from vehicle taxation are declining. The Institute for Fiscal Studies projects annual decreases from £38Bn (2010) to £25Bn (2029), due to improved fuel efficiency and adoption of alternative fuels, equivalent to increasing the basic rate of income tax from 20p to 23.4p,increasing VAT from 20% to 22.7%, or increasing fuel duty by more than 50% (Johnson, Leicester & Stoye 2012). The fiscal imperative has been given added impetus by the proposed ban on new petrol and diesel cars from 2040. Similar predictions concerning fiscal impacts have been made in the United States (Figure 1).
Figure 1: Fuel Efficiency Contributes to Revenue Loss (Source: California Road Charge Pilot Program)

Figure 1: Fuel Efficiency Contributes to Revenue Loss
(Source: California Road Charge Pilot Program)

The solution is road pricing
The solution – the nearest thing to a “silver bullet” – is road pricing. As Eddington said, ‘the potential for benefits from a well-designed, large-scale road pricing scheme is unrivalled by any other intervention’ (Eddington, 2006). The UK DfT agreed in ‘Towards a Sustainable Transport System’ (DfT (2007), stating: ‘The Government accepts the Eddington analysis regarding the exceptional case for exploring the potential of road pricing’.

But how to make it politically and publicly acceptable?
The issue is how to make road pricing acceptable to the public and politicians. Superficially this seems impossible, considering the 1.8 million signature petition against it on the Prime Minister’s website in 2007, and the Edinburgh and Manchester referenda results. However, studies indicate that Edinburgh voters did not understand what was proposed (Gaunt, Rye & Allen 2007), and anecdotal evidence suggests the same in Manchester (Sherriff 2018) [1] . We cite evidence that road pricing is acceptable to public opinion, given certain conditions:

  • that it is equitable – which it is, compared to alternatives, especially if it is revenue-neutral or if surplus revenues are recycled into transport. Schweitzer and Taylor (2010) demonstrated that it is less regressive than other taxation, saying ‘we should not subsidise all drivers (and charge all consumers) to help the small number of poor travelers who use congested freeways in the peak hours and peak directions. Rather we should help those who are less fortunate, and see to it that the rest of us pay our own way on the roads’;
  • that it does not have high cost overheads; 5% is achievable (Whitty 2018) [2]. This is higher than the cost of collecting fuel duty, though US evidence suggests that such costs are underestimated; but fuel duty has no traffic management or congestion and pollution reduction effects.
  • that people affected have experience that road pricing works (Beria, Tosi & Nuccio 2018). Public education and especially public demonstration are necessary.

Counter-intuitive aspects of road pricing
Some aspects of road pricing are surprising or counter-intuitive (Walker 2011):

  • People voted to introduce road pricing in Stockholm. Despite initial opposition of 62% of the population, a temporary road pricing scheme demonstrated dramatic congestion reduction, so a majority of residents voted to make it permanent. It is currently supported by 74% of the population, and is no longer a political issue.
  • Ken Livingstone was elected as Mayor of London on a manifesto including congestion charging [3].
  • Significant traffic reductions are achievable with minimal charges. In Stockholm, SEK 10, 15 or 20 (between 87p and £1.74), depending on time of day, produced traffic reductions greater than 20%.
  • It does not cause traffic diversion onto other routes, at least not in cities. Minimal diversion was seen in Stockholm and London.
  • Provision of improved public transport alone will not get people out of their cars. In Stockholm, extra buses were introduced in August 2005, but there was no effect on road traffic until January 2006 when the Congestion Tax began.

Road pricing technology is proven and in use
The technology to implement road pricing is proven and in use world-wide, mainly using microwave tags, automatic number-plate recognition and satellite positioning. It is improving in performance and decreasing in cost. Singapore has had road pricing in its Central Business District since 1975, an electronic system since 1995, and will upgrade to a satellite-based system in 2019-20. London, Stockholm and Milan all have successful electronic road-pricing schemes, accepted and voted for by the electorate, as do many Norwegian cities. Electronic truck tolling operates in Austria, Belgium, Czech Republic, Germany, Hungary, Russia, Slovakia, Switzerland, New Zealand and even the UK (the HGV Road User Levy) – in some cases on all roads, not just motorways.

Road pricing can manage road traffic demand, including differentially at busy times, can charge by vehicle emission class, to manage pollution and encourage cleaner, quieter vehicles, and can raise revenue for infrastructure development.

What are NOT the solutions to the problems of road use
A number of policies are not, on their own, solutions to the problems of road use. Better public transport cannot cope in all the circumstances needed, public transport systems that share road space with the car will get caught up in congestion, whilst public transport systems with dedicated rights of way and pay-as-you go charging will struggle to compete with cars that are perceived as free at the point of use (Duranton & Turner 2009, Ellis 2010). Autonomous vehicles are still decades away from widespread use and may even increase congestion, particularly in mixed traffic conditions (DfT 2016b). More road building can be counter-productive in certain circumstances due to induced demand (Duranton & Turner 2009).

How to make road pricing viable and acceptable
Pointers to making road pricing viable and acceptable, in addition to the ones mentioned earlier, include:

  • Education and focus group studies as previously conducted by DfT (Owen et al. 2008);
  • Behavioural psychology – as yet unused in this area (Kahneman &Tversky 1984).
  • Publicity campaigns such as those of Transport for London (figure 2), using conventional and social media, and the use of infographics such as those by the University of California at Los Angeles (UCLA 2017) (Figure 3);
  • Ensuring that drivers benefit, as well as other sectors of the community, by making the charging revenue-neutral initially, and combining it with reduced parking charges [4], concessions, discounts for local residents, exemptions and other benefits.
  • Giving drivers several payment options, and ensuring their privacy is protected.
  • Implementing High Occupancy Toll lanes in suitable locations, so that drivers experience the benefits.
  • Develop road user charging as part of Mobility as a Service packages.
  • Modelling of candidate schemes – without a transport model that takes local conditions into account, a system design may create more problems than it solves, by shifting congestion to other parts of the network or by initiating barriers or rat-running within residential areas (Börjesson & Kristoffersson 2014).

Interesting alternatives and potential complements to road pricing are “Spitsmijden” schemes (‘avoiding peak traffic’ in Dutch) (Mouris, Nijhuis & Black  2018). They use similar technologies for enforcement, but differ by paying drivers to avoid certain roads or areas during peak hours, and by selecting volunteers to participate in a scheme rather than a blanket approach for all road users.

Figure 2: Benefits of the London congestion charge

Figure 2: Benefits of the London congestion charge

Figure 3: UCLA Infographic on Road Pricing (UCLA 2017)

Figure 3: UCLA Infographic on Road Pricing (UCLA 2017)

Conclusions and recommendations
According to Sherriff (2018) we must widen the debate  “ .. to make it clear that this is not simply about the ‘driver’ versus the rest of society but about how a diverse range of people access the services they need, breathe clean air, and are protected from the impacts of climate change”. Furthermore “A referendum is an extremely limited way to make such a complex decision, provides no guarantee of the most sustainable or fair outcome, and limits the potential to revisit road pricing in the future. This is not to discount democracy – as opponents of referenda are commonly accused of – but to point out the relative benefits of persevering through existing democratic structures”.

Our view of the future is that road pricing will be adopted widely in the UK within the next 10-15 years. The HGV Road User Levy will be extended to lighter freight vehicles. And when we as private motorists tax our (electric) car, we will also pay for annual mileage (possibly on a monthly basis), with the charge adjusted in the light of MoT data on actual usage, at the time of re-sale, or, as suggested by Gergely Raccuja (Wolfson 2017),  in the premium when we renew our insurance. Our congested cities and strategic transport corridors will have additional charges to use road space related to congestion, perhaps with discounts on public transport alternatives and other added value propositions.

It may take time to change public opinion, and get political support; the sooner we start, the better. According to Whitty (2018) “Widespread, mandated distance charging in the United States is not that far away” [5]. It would be beneficial for everyone if we could say the same for the United Kingdom.  ◆

Footnotes

  1. As Sherriff points out, in respect of the Greater Manchester Transport Innovation Fund bid “GMTIF was seen by many to be an opportunistic grab of national funding. There is a lesson here for national policy to avoid being counter-productive by expecting towns and cities to develop relatively quick and competitive responses to national calls. There is a related lesson for conurbations to be proactive in developing transport policy strategically, allowing time and democratic space for the involvement of businesses, citizens’ groups and political representatives: far from an appeasement process – which opponents may cast it as – this should be seen as a collaborative development of transport policy and an opportunity to get to the roots of car dependency.
  2. London, where collection and associated costs, constituted over one third of gross congestion charge revenue in 2016/17 might be seen as an exceptional case, as due to its pioneering role (at least for the UK) the scheme was over-engineered to ensure high levels of compliance.
  3. Although so was Boris Johnson on a policy of scrapping the Western Extension. The current Mayor, Sadiq Khan, seems to be ambivalent on congestion charging – and is instead focused on the Toxicity charge.
  4. Though this could be counter-productive- especially in terms of land-use, as lower parking charges may encourage more car-dependent development.
  5. James Whitty, former manager of the Oregon DOT Office of Innovative Partnerships and Alternative Funding, and administrator for its Road User Fee Task Force (RUFTF) was involved in various Oregon road pricing trials for at least 15 years, prior to moving to D’Artagnan Consulting, where he is working not only on the Oregon trials but also on those in California, Washington State and Hawaii.

References

BBC (2017) “Reality Check: Does pollution cut short 40,000 lives a year?”, http://www.bbc.co.uk/news/science-environment-39129270

Beria, Tosi & Nuccio (2018). “Four years of Milan’s road charge: effectiveness, acceptability and impacts”. To be published in “Road Pricing: Technologies, economics and acceptability”, edited by J Walker. Institution of Engineering & Technology, February 2018.

Börjesson M & Kristoffersson I (2014) “The Gothenburg congestion charge: Effects, design and politics”. CTS Working Paper 2014:25, Centre for Transport Studies, Stockholm. Also in Transportation Research Part A: Policy and Practice, 2015, vol. 75, issue C, pages 134-146.

DfT (2007). Towards a Sustainable Transport System: Supporting Economic Growth in a Low Carbon World. Cm 7226, The Stationery Office (TSO). http://www.official-documents.gov.uk/document/cm72/7226/7226.pdf.

DfT (2015) “Transport Statistics Great Britain 2015”.

DfT (2016a) “Reported road casualties in Great Britain: main results 2015”, UK Department for Transport Statistical Release, 30 June 2016.

DfT (2016b) “Research on the Impacts of Connected and Autonomous Vehicles (CAVs) on Traffic Flow”, Summary Report, UK Department for Transport/Atkins, May 2016.

Duranton G & Turner MA (2009) “The fundamental law of road congestion: evidence from US cities”, Working Paper 15376, http://www.nber.org/papers/w15376, National Bureau Of Economic Research, Cambridge, MA 02138, September 2009.

Eddington, R. (2006). The Eddington Transport Study. The Case for Action: Sir Rod Eddington’s Advice to Government. http://www.thepep.org/ClearingHouse/docfiles/Eddington.Transport.Study%20-%20Rod.pdf.

Ellis T (2010) “Dutch courage, English lessons”. Traffic Technology International, August/September 2010: 044–047. http://viewer.zmags.com/publication/e8eddeaa#/e8eddeaa/1v.

Gaunt, M., Rye, T. & Allen, S. (2007). Public acceptability of road user charging: the case of Edinburgh and the 2005 referendum. Transport Reviews, 27(1): 85–102.

Inrix (2014) Joint study with the Centre for Economics and Business Research.  http://inrix.com/press-releases/traffic-congestion-to-cost-the-uk-economy-more-than-300-billion-over-the-next-16-years/ .

Johnson, P, Leicester, A & Stoye G (2012) “Fuel for Thought: The what, why and how of motoring taxation”, Institute for Fiscal Studies and RAC Foundation.

Kahneman D &Tversky A (1984), “Choices values and frames.” American Psychologist, 39 (4), 341-350. See also Kahneman (2011) “Thinking, Fast and Slow”, Penguin Books, London.

Owen, R., Sweeting, A., Clegg, S., Musselwhite, C. & Lyons, G. (2008). “Public Acceptability of Road Pricing”. Final Report for UK Department for Transport.

Mouris R, Nijhuis J & Black C (2018), “Optimising Use – using incentives to address traffic congestion”. To be published in “Road Pricing: Technologies, economics and acceptability”, Edited by J Walker. Institution of Engineering & Technology, February 2018.

Schweitzer L & Taylor BD (2010). Just road pricing. ACCESS (magazine of the University of California Transportation Center), 36: 2–7.

Sherriff (2018) “Communication and governance challenges in Greater Manchester’s ‘congestion charge’ referendum. To be published in “Road Pricing: Technologies, economics and acceptability”, Edited by J Walker. Institution of Engineering & Technology, February 2018.

UCLA (2017) Infographics on Road Pricing – http://www.its.ucla.edu/infographic-road-pricing/.

Walker J (2011) “The Acceptability of Road Pricing”. http://www.racfoundation.org/research/economics/road-pricing-acceptability.

Whitty (2018) “West Coast Distance Charge Programs: An Open Market as the Gateway to Implementation in the United States”. To be published in “Road Pricing: Technologies, economics and acceptability”, edited by J Walker. Institution of Engineering & Technology, February 2018.

Wolfson (2017) ”Wolfson Economics Prize”,  https://policyexchange.org.uk/wolfsonprize/

Professor John Preston Transportation Research Group, University of Southampton

Professor John Preston Transportation Research Group, University of Southampton

Dr John Walker  Transportation Research Group, University of Southampton

Dr John Walker
Transportation Research Group, University of Southampton