Environmental Valuation & Cost-Benefit News

Link: http://hal.archives-ouvertes.fr/docs/00/41/45/26/PDF/2009-30.pdf

Abstract: This paper reviews the methods and technologies for congestion pricing of roads. Congestion tolls can be implemented at scales ranging from individual lanes on single links to national road networks. Tolls can be differentiated by time of day, road type and vehicle characteristics, and even set in real time according to current traffic conditions. Conventional toll booths have largely given way to electronic toll collection technologies. The main
technology categories are roadside-only systems employing digital photography, tag and beacon systems that use short-range microwave technology, and in vehicle-only systems based on either satellite or cellular network communications. The best technology choice depends on the application. The rate at which congestion pricing is implemented, and its ultimate scope, will depend on what technology is used and on what other functions and services it can perform. Since congestion pricing calls for the greatest overall degree of toll differentiation, congestion pricing is likely to drive the technology choice.

The European UNITE project estimated the costs of traffic congestion in the UK to be ₤15 billion per year or 1.5% of GDP (Nash et al., 2003). For France and Germany the estimates were 1.3% and 0.9% of GDP respectively. The Texas Transportation Institute conducts an annual survey of traffic congestion in major US cities. According to the 2009 report, in 2007 congestion caused an estimated 4.2 billion hours of travel delay and 2.8 billion gallons of extra fuel consumption with a total cost of $87 billion (Schrank and Lomax, 2009).
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The London Congestion Charge has been closely monitored since it was introduced in 2003. The fifth annual report (Transport for London, 2007) estimated the gross annual benefits of the original scheme at £200 million ($326 million)3 and the total costs at £88 million ($143 million), resulting in a net benefit of £112 million ($183 million) and a benefit-cost ratio of 2.27.4.
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There are several reasons to implement distance-based tolls for heavy goods vehicles first. Many HGVs are already equipped with GPS-based fleet management systems and additional equipment for levying tolls can be added at moderate cost. Toll collection costs per unit of revenue are likely to be much lower than for passenger vehicles because trucks are driven long distances and pay higher tolls per kilometer. And truck drivers and shippers are already familiar with the technology and seem less concerned about privacy than automobile drivers. Some new automobiles are equipped with on-board units that make distance-based pricing practical at reasonable cost.52 However, older vehicles lack this equipment and retrofitting is difficult and costly (Whitty, 2009). A prolonged phase-in period for passenger vehicles is therefore likely before satellite (or possibly cellular) technology could become universal.
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by André de Palma 1 and Robin Lindsey 2
1. Ecole Normale Supérieure de Cachan, Department of Economics Ecole Polytechnique, Institut Universitaire de France
2. Department of Economics University of Alberta, Edmonton, Alberta
Ecole Polytechnique Centre National de la Recherche Scientifique Departement D'Economie
Cahier n° 2009-31; September 2009
Route de Saclay, 91128 PALAISEAU CEDEX, (33) 1 69333033
http://www.enseignement.polytechnique.fr/economie/
mailto:chantal.poujouly@polytechnique.edu
via REPEC Research Papers in Economic www.REPEC.org