Road Pricing 101 and Public Acceptance Issues · 1 Road Pricing 101 and Public Acceptance Issues...
Transcript of Road Pricing 101 and Public Acceptance Issues · 1 Road Pricing 101 and Public Acceptance Issues...
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Road Pricing 101 andPublic Acceptance Issues
Robin Lindsey
Transport Futures 2009: Road Pricing & Public Acceptance
November 12, 2009
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OutlineOutline
1. Transportation problems in Canada
2. The case for road pricing
3. Forms of road pricing
4. Public attitudes toward road pricing
(general, worldwide)
5. Public attitudes toward road pricing in
Canada
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1. Transportation problems in Canada
a) Inadequate and inequitable funding of
transportation
b) Traffic congestion and other external
costs of road travel
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1a) Means of funding transportation
Funding roads in OntarioFederal & provincial sources
Taxes: Fuel, income, salesFunds (e.g. Building Canada; Gateway)Stimulus packagesTolls
Municipal sourcesProperty taxes (major)Development charges (minor)Parking fees, license fees
Most revenue sources are not earmarkedSources: Ontario Good Roads Association, Harry Kitchen
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1a) Inadequate funding
• Declining cost recovery for roads (71%, 2007-08)
• Large transit deficits• Major investment plans for roads and transit
(esp. Montréal, Toronto & Vancouver)
• Federal infrastructure funds are temporary
• Fuel tax revenues vulnerable to increasing vehicle fuel economy, alternative-fuel vehicles & difficulty in raising fuel taxes
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1a) Inequitable funding
• Most revenue sources do not respect the user pays (beneficiary) principle
• Traditional revenue sources may be more regressive than user charges
Example: cost burden of tolls on State Route 91 vs. local option transportation sales tax (Schweitzer and Taylor, 2009)
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1b) Traffic congestion
Transport Canada (2006a) study
Quantified costs of recurrent traffic congestion.
1. Travel delay (90%)2. Additional fuel consumption (7%)3. Additional greenhouse gas emissions (3%)
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1b) Traffic congestion
Urban Area Annual cost (million, $2002)
Annual cost per capita
Toronto $1,267 $271
Montréal $854 $249
Vancouver $517 $260
Ottawa-Gatineau (all) $61 $58
Calgary $112 $118
Edmonton $62 $66
Québec City $52 $77
Winnipeg $77 $115
Hamilton (all) $11 $17
Total, all urban areas $3,015
Transport Canada (2006a): recurrent congestion
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1b) Traffic congestion
Transport Canada (2006b): add nonrecurrent congestion
Urban Area Recurrent only
(million, $2002)
Recurrent & nonrecurrent
(million, $2000)
Toronto $1,267 $2,474
Montréal $854 $1,390
Vancouver $517 $927
Ottawa-Gatineau (all) $61 $172
Calgary $112 $211
Edmonton $62 $116
Québec City $52 $104
Winnipeg $77 $169
Hamilton (all) $11 $33
Total, all urban areas $3,015 $5,580
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1b) Traffic congestion
Estimates exclude:freight transportoff-peak congestioncongestion-related costs of accidents, noise,
local emissions, road damage & behavioral adaptations
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1b) Traffic congestion
OECD study conclusions (Nov. 2009)
Cost of traffic congestion in Toronto: $3.3 billion in lost productivity. [Methodology?]
In 2005 federal spending in Canada on transportation as share of total spending was lowest in the OECD.
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OutlineOutline
1. Transportation problems in Canada
2. The case for road pricing
3. Forms of road pricing
4. Public attitudes toward road pricing
(general, worldwide)
5. Public attitudes toward road pricing in
Canada
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2. The case for road pricing
• As additional revenue source, satisfying user pays principle
• To relieve congestion
• To price emissions and other external costs of transport
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Tolled facilities in CanadaNew Brunswick Confederation Bridge (to Prince Edward Island ) Bridge Electronic Saint John Harbour Bridge Bridge Electronic Nova Scotia A. Murray MacKay Bridge Bridge Angus L. Macdonald Bridge Bridge Cobequid Pass/Highway 104 Toll Highway Road Electronic Ontario Highway 407 Road Electronic, Variable
Quantity discounts Ambassador Bridge Bridge Electronic, Quantity discounts Blue Water Bridge Bridge Detroit-Windsor Tunnel Tunnel Lewiston-Queenston Bridge Bridge Ogdensburg-Prescott Bridge Bridge Quantity discounts Peace Bridge Bridge Electronic Rainbow Bridge Bridge Sault Ste. Marie International Bridge Bridge Seaway International Bridge, North Channel Span Bridge Seaway International Bridge, South Channel Span Bridge Thousand Islands Bridge System Bridge Quantity discounts Whirlpool Rapids Bridge Bridge British Columbia Golden Ears Bridge Bridge Electronic Coquihalla Highway Ended in 2008 Road
TOTALS Bridges: 16 Roads: 2 Tunnel: 1
Electronic: 7 Variable: 1 Discounts: 4
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Limitations of road pricing in Canada
Only 199 km tolledCompare: Over 8,500 km. of toll roads in the US Toll revenues of $483 million (2008) = 0.36% of total
personal expenditures on road travel
Use of electronic toll collection limitedTolls are not congestion charges
Quantity discountsFlat except on Highway 407Highway 407 privately owned and operated
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OutlineOutline
1. Transportation problems in Canada
2. The case for road pricing
3. Forms of road pricing
4. Public attitudes toward road pricing
(general, worldwide)
5. Public attitudes toward road pricing in
Canada
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3. Forms of road pricing
Type of scheme Examples Facility-based
High occupancy toll (HOT) lanes Express toll lanes Highways
Interstate 15 State Route 91 Highway 407
Area-based Cordons Zones
Norwegian cities; Stockholm London
Road networks Singapore: some expressways, arterials Heavy Goods Vehicles: Switzerland,
Austria, Germany
Regional US pilot tests: Oregon, Puget Sound, U. of
Iowa
National Britain (2004) The Netherlands: Dutch Mobility Plan US: Commissions (2008, 2009)
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Degree of time variation
Degree of time variation Examples
Flat Most roads
Variable (scheduled) State Route 91; Highway 407
London; Stockholm
Singapore
Dynamic (responsive) I-15; I-394
Cambridge UK proposal (1990s)
Anticipatory (predictive) Academic research
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Technology requirements
Road usage measurement
Data communication for billing purposes
Calculation of bills
Enforcement
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Technology choices
Type of system Technologies used
Conventional Toll booths, payment manually
Electronic Toll Collection
1. Roadside-only Automatic Number Plate Recognition
2. Tag and beacon Short-range microwave On-board in-vehicle units/smartcards or monthly billing
3. In vehicle-only Cellular networks (GSM) Global Navigation Satellite Systems (GPS, Galileo)
Enforcement Automatic Number Plate Recognition Mobile monitors
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OutlineOutline
1. Transportation problems in Canada
2. The case for road pricing
3. Forms of road pricing
4. Public attitudes toward road pricing
(general, worldwide)
5. Public attitudes toward road pricing in
Canada
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Traditional objections to road pricing [1]Traditional objections to road pricing [1]
1. Paying for something that was free
Canadian roads traditionally provided publicly without direct user charges.
2. Double taxationMost road-pricing schemes not revenue neutral.
The Netherlands intends to modify its current road tax system.
UK has considered lowering fuel taxes if a national scheme is introduced.
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Traditional objections to road pricing [2]Traditional objections to road pricing [2]
3. InequitableWith respect to income
Higher-income groups more likely to gain because willing to pay more for travel time savings.
Counters: Depends on travel volume, mode choice, use of toll revenues.
With respect to locationLocation relative to tolled facilities
Boundaries of area-based schemes
Toll differentiation on road networks
Tolling of residential streets, private roads
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Traditional objections to road pricing [3]Traditional objections to road pricing [3]
4. System complexity
People dislike complex price structures
This militates against varying tolls frequently by time of day, multiple charging points, discounts ...
Complex schemes that failed:
• Hong Kong proposals (1985, mid-1990s)• Edinburgh double cordon (2005)• Manchester double cordon (2008)• New York City area-based scheme (2008)
Complex schemes that succeeded:• HOT lanes in US with dynamic tolls• Electronic road-pricing in Singapore
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Traditional objections to road pricing [4]Traditional objections to road pricing [4]
5. Invasion of privacy
Largely addressed by anonymous electronic tolling technology
Concern with satellite-based systems
6. Loss of retail business
Retailers generally oppose road pricing initially.
But:
Studies indicate effects are modest
Any lost business from drivers could be offset by gains from shoppers using other modes.
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Additional objection to road pricing [5]Additional objection to road pricing [5]
7. Other revenue sources cheaper to collect
But:Other sources distort incentives (work, location, …)
Other sources are inequitable
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Opposition to UK national schemeOpposition to UK national scheme
1. “The idea of tracking every vehicle at all times is sinister and wrong.”
2. “Road pricing is already here with the high level of taxation on fuel. The more you travel - the more tax you pay.”
3. “It will be an unfair tax on those who live apart from families and poorer people who will not be able to afford the high monthly costs.”
4. “Please Mr Blair - forget about road pricing and concentrate on improving our roads to reduce congestion.”
1. Invasion of privacy2. Double taxation3. Inequitable4. Views improving roads as an alternative to tolls
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Recent US survey evidence [1]Recent US survey evidence [1]
Survey of 110 US public opinion studies of pricing
Source: Zmud (2008, NuStats)
Majority support Majority opposition
Overall 56% 31%
Type of respondent
Potential users 74% 15%
Registered voters 71% 24%
General public 42% 42%
Wording of question
Additional information provided 94%
None 48%
Context
Specific project 62%
General opinion 48%
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Recent US survey evidence [2]Recent US survey evidence [2]
Source: Zmud (2008, NuStats)
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Recent US survey evidence [3]Recent US survey evidence [3]
Public support generally higher for:
Specific projects with tangible benefits
Revenues earmarked for highways or public transitNot to special interest groups such as investors
Simple projectsPrefer toll roads to mileage fees
Tolls preferred to taxes or reduced service
Source: Zmud (2008, NuStats)
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Attitudes before and afterAttitudes before and after
Support increases after tolling begins
Norway
London
Stockholm
U.S. HOT lanes …
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OutlineOutline
1. Transportation problems in Canada
2. The case for road pricing
3. Forms of road pricing
4. Public attitudes toward road pricing
(general, worldwide)
5. Public attitudes toward road pricing in
Canada
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Historic opposition to tolls [1]
Fredericton-Moncton highway project
In 1998, New Brunswick government entered a PPP (design, finance, build, operate & maintain, 25 years).
Toll to be imposed on pre-existing toll-free section.
Public resistance to toll contributed to downfall of government.
New government revised contract to compensate contractor with shadow tolls.
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Historic opposition to tolls [2]
Coquihalla Highway
Operated as public toll road 1986-2008.
In 2003, BC government proposed privatization on 55-year lease.
Car toll expected to jump from $10 to $13, and rise over time.
Massive opposition.
Government backed down.
Car toll remained at $10 until tolling ended.
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Public attitudes in Québec
Preferred type of user charge
Source: Léger Marketing (2007)
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Summary: Public attitudes in Canada
Tolls more acceptable:
On new capacity (especially if not otherwise built).
If a reasonable toll-free alternative exists.
If revenues earmarked to the tolled facility.
If toll increases are moderate.
Overall: Attitudes vary across governments,
other institutions and the public.
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References
Kitchen, H. 2008. “Financing Public Transit and Transportation in the Greater Toronto Area and Hamilton: Future Initiatives”, January, The Residential and Civil Construction Alliance of Ontario (www.infracoalition.ca).
Léger Marketing. 2007. “Opinion of Quebeckers on road network funding.” Montreal Economic Institute Research Report September 2007, MEI-Journal de Montréal-Léger Marketing Opinion Poll, September 2007 (www.iedm.org/uploaded/pdf/sondage0907_en.pdf).
Lindsey, Robin. 2006. “Do Economists Reach a Conclusion on Highway Pricing?: The Intellectual History of an Idea.” Econ Journal Watch. 3(2): 292-379.
Lindsey, Robin. 2007. “Congestion Relief: Assessing the Case for Road Tolls in Canada.” C.D. Howe Institute Commentary 248.
Lindsey, R. 2008. “Prospects for Urban Road Pricing in Canada.” G. Burtlessand J. Rothenberg Pack (eds.), Brookings Wharton Papers on Urban Affairs: 2008, 235-293.
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References
Mylvaganam, C. and Borins, S. 2004. If you Build it ... Business, Government and Ontario’s Electronic Toll Highway, University of Toronto Centre for Public Management, Toronto: University of Toronto Press.
Schade, J. and Schlag, B. eds. 2003. Acceptability of Transport Pricing Strategies, Elsevier, Amsterdam.
Schweitzer, L. and B.D. Taylor. 2009, “Just pricing: the distributional effects of congestion pricing and sales taxes”, Transportation, DOI 10.1007/s11116-008-9165-9.
Transport Canada. 2006a. The Cost of Urban Congestion in Canada, Ottawa: Transport Canada, Environmental Affairs. March 22 (http://www.tc.gc.ca/programs/Environment/EconomicAnalysis/docs/summary.pdf)
Transport Canada. 2006b. Costs of Non-Recurrent Congestion in Canada Final Report, Transport Canada Economic Analysis TP 14664E, December 11 (http://www.tc.gc.ca/pol/en/aca/fci/road/menu.htm)
Zmud, J. 2008. “The public supports pricing If … A synthesis of public opinion studies on tolling and road pricing.” International Bridge, Tunnel and Turnpike Association, Tollways, Winter, 28-39 (http://www.ibtta.org/files/PDFs/win08_Zmud.pdf).