How Congestion Costs

As a road nears capacity, each new car added slows down all the other cars on the road. This creates costs in terms of increasing the amount of petrol used and emissions produced - since more petrol is consumed at lower speeds - as well as wasted time and missed deliveries, meetings, trains etc. In congested conditions these 'social costs' add up to far more than the ‘private cost’ of actually running the car. A good congestion charge attempts to mirror the wider costs being caused to others in this way(1).

Tracking or zoning?

To follow the theoretical model, charging for the use of roads should closely follow the level of congestion on the roads. A particularly congested section of roadway should cost more to travel on than a quiet road. Plans under discussion currently even include the concept of electronic roadsigns bearing continually updated prices(2) for some congested routes.

To work effectively this way:

  • Traffic levels have to be monitored in real time
  • Charges have to be altered and displayed in real time
  • Cars must be tracked throughout their journey and charged accordingly

If such a classic road pricing system could be made to work, the effect would be to regulate traffic movement to get as many cars as possible across the road network. It would mean traffic was more 'efficiently' distributed than currently is the case, with many quieter roads doing their share. It is possible that it could even cause a net increase in road traffic, and therefore pollution and road casualties, unless deliberately designed to do otherwise(3).

Many people are also uneasy about the idea of tracking all individual cars through a road network and storing detailed records(4) of their movements for charging purposes. This issue certainly is cause for concern in the current atmosphere of expanding police powers, CCTV and the 'database state'. We should not have to surrender privacy of movement in order to excercise freedom of movement.

Notes and References

Congestion charging is therefore a textbook 'Pigouvian tax'. For more on the theoretical background to this see "The Economic Efficiency Case for Road User Charging" (Nash, Mackie, Shires and Nellthorp, Institute for Transport Studies, University of Leeds, 2004).

This seems incredible, but it's being put forward as a serious idea:

"Using new technology will also help people make informed decisions - people should feel more like consumers and be able to make active choices about the times and routes of car travel based on information about levels of congestion and price." - from "Managing our roads" pg. 6 (Department for Transport, 2003).

This would hold if the system were to be strictly 'revenue neutral' - meaning that road users generally wouldn't pay any more than they do currently, and if road users behave according to economic theory, each trying to minimise their costs. 'Rat-running' - using quiet streets as short-cuts to avoid congestion - becomes a shrewd way of saving money.

As part of the plans, the DfT anticipate introducing new acts of primary legislation to get around Data Protection issues connected with routine data sharing between Government bodies, local and national, plus the private companies who will of course end up managing, running and enforcing the scheme. See Annex G (Compliance, Enforcement and Privacy) to the DfT's Road Pricing Feasibility Study. The article "Overlooked: Surveillance and personal privacy in modern Britain" by Gareth Crossman and others is a good introduction to the issue of privacy and retention of government records. Also see note 1 on page 7.