Peak Hour

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EXPERT OBSERVERS
Congestion charging should be introduced in Australia’s largest cities, as Grattan Institute’s <a href="https://grattan.edu.au/report/why-its-time-for-congestion-charging" target="_blank">latest report</a> shows. Our analysis also finds that the people who commute to the Melbourne and Sydney CBDs by driving are two to three times as likely to earn six-figure salaries as other Australian workers.
One of the main concerns about charging drivers who use the busiest roads at the busiest times has been about fairness. But sensible congestion charges could be designed to avoid burdening financially vulnerable people who lack alternatives to using particular roads at busy times.
Congestion charging is gaining traction in cities around the world as a proven method to manage congestion. <a href="https://ops.fhwa.dot.gov/publications/fhwahop08047/02summ.htm" target="_blank">London, Singapore, Stockholm</a> and <a href="https://www.citylab.com/transportation/2015/09/milan-abruptly-suspended-congestion-pricing-and-traffic-immediately-soared/404521/" target="_blank">Milan</a> all have congestion charging schemes. New York City legislators have approved plans to introduce it in <a href="https://www.pri.org/stories/2019-05-30/new-york-city-gets-nations-first-congestion-pricing-plan" target="_blank">Manhattan</a>.
<h2>It’s better than building new infrastructure</h2>
Sydney and Melbourne are big, global cities, but with growth and prosperity comes congestion. The solution from the <a href="https://theconversation.com/transport-promises-for-election-2019-the-good-the-bad-and-the-downright-ugly-115138" target="_blank">federal</a>, <a href="https://theconversation.com/how-the-nsw-election-promises-on-transport-add-up-112531" target="_blank">New South Wales</a> and <a href="https://theconversation.com/how-much-will-voters-pay-for-an-early-christmas-eight-charts-that-explain-victorias-transport-election-106782" target="_blank">Victorian governments</a> has been to throw money at huge infrastructure projects. Politicians like promising infrastructure because large benefits can be targeted at key voters, while <a href="https://grattan.edu.au/report/roads-to-riches/" target="_blank">the costs are spread across all taxpayers</a>.
But this means many people are paying to alleviate some people’s congestion. And the relief from new infrastructure tends to be short-lived. In Australia’s fast-growing cities, extra public transport capacity at peak times gets chewed up quickly, while new freeways tend to fill with new traffic soon after opening.
This doesn’t mean governments should stop investing in infrastructure. But it does raise the question of whether spending billions of taxpayer dollars is the best or fairest way to tackle congestion.
We usually think of congestion as a force that slows us down, without thinking about how we slow everyone else around us. Congestion charging fixes this by charging a modest fee to use the busiest roads. Drivers then have to decide whether it’s worth making their trip at that time on that road.
Drivers who need to travel at peak times are always able to do so – they just need to pay a fee. Heavy users will end up paying more for using an in-demand resource. The most flexible drivers will save money by travelling later, or elsewhere, or by another mode. And this means getting out of everybody else’s way.
Charging is also fairer than the licence-plate approach of Mexico City or Beijing, where cars are banned from driving on certain days depending on their licence plate numbers. These heavy-handed restrictions ignore the fact that people’s travel needs vary from day to day. Why ban a driver on the day of a job interview?
<h2>But what about all the drivers on low incomes?</h2>
It’s fair to ask whether congestion charging will burden the most vulnerable people in society. And the answer depends on the design of the scheme.
First, the people who we should really worry about are those who: are struggling financially; frequently or urgently need to travel on charged roads or to a charged area; and lack good alternatives to driving at that time on those roads.
A sensible congestion charge would target only the busiest roads and areas – think central business districts (CBDs), major freeways and key arterial routes – and only at times of high demand such as peak hour.
So if Sydney or Melbourne were to introduce a peak-period congestion charge around their CBDs, how many vulnerable people would be affected? Hardly any.
Our research shows the drivers who would pay the charge tend to be doing just fine. It’s mostly commuters and people driving as part of their job – think tradespeople and couriers. Those travelling for work could pass the cost on to their customers – every tradie driving to the CBD would face the same charge, so no one would gain or lose a competitive advantage.
 
<h2>Most CBD drivers are well-off</h2>
And the CBD commuters? They tend to earn much more than the typical Australian.
Grattan Institute analysis shows most people driving to the Sydney CBD for work each day earn six-figure salaries. Their median income is nearly A$2,500 a week – about A$1,000 a week more than the typical income for full-time workers in Sydney.
It’s a similar story in Melbourne. The median full-time worker driving to the CBD earns nearly A$2,000 a week – about A$650 more than the typical full-time worker in Melbourne.
<a href="https://images.theconversation.com/files/296601/original/file-20191011-188835-frfve2.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/296601/original/file-20191011-188835-frfve2.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a>
And these CBD commuters are also generally well-served by public transport. The CBD is the most accessible location in Sydney and Melbourne, with multiple train lines and bus or tram routes running through it.
That’s why most people travel to the CBD by public transport. In Sydney, barely one in six full-time CBD workers actually commute by private vehicle. In Melbourne, it’s only a quarter. But these workers typically earn a lot more than the people on CBD-bound buses, trams and trains.
<a href="https://images.theconversation.com/files/296358/original/file-20191010-188823-11gu703.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/296358/original/file-20191010-188823-11gu703.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a> <a class="source" href="https://grattan.edu.au/report/why-its-time-for-congestion-charging" target="_blank">Grattan Institute</a>, Author provided
Perhaps surprisingly, drivers to the CBD are more likely to come from inner, richer parts of the city – think Mosman and Double Bay, not Penrith or Parramatta. It’s the same in Melbourne: more people drive from Kew and Richmond than Broadmeadows or Dandenong. Even those driving in from lower-income areas typically earn more than most of their neighbours.
This means the number of genuinely disadvantaged people who would be burdened by a congestion charge is small. As for one-off trips to the CBD – maybe for a specialist appointment – these are by definition infrequent and can often be rescheduled to the middle of the day.
State governments should consider discounts for low-income people with impaired mobility. However, wide-ranging exemptions would badly undermine the effectiveness of the congestion charge – <a href="https://www.citylab.com/transportation/2018/04/londons-congestion-charge-needs-updating/557699/" target="_blank">as happened in London</a>.
<a href="https://images.theconversation.com/files/296357/original/file-20191010-188792-2qbjjm.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/296357/original/file-20191010-188792-2qbjjm.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a> <a class="source" href="https://grattan.edu.au/report/why-its-time-for-congestion-charging" target="_blank">Grattan Institute</a>, Author provided
Congestion charging is a smarter way to improve Australia’s largest cities and fears that it would be unfair are overblown. It should be the centrepiece of a mixed strategy to tackle congestion. The NSW and Victorian governments should introduce <a href="https://www.jstor.org/stable/10.7249/mg748jat-metro-mcla.36?seq=1#metadata_info_tab_contents">cordon charging</a> around the CBDs of their capitals within the next five years.
<a href="https://theconversation.com/profiles/marion-terrill-169480" target="_blank">Marion Terrill</a>, Transport and Cities Program Director, <a href="http://theconversation.com/institutions/grattan-institute-1168" target="_blank">Grattan Institute</a> and <a href="https://theconversation.com/profiles/james-ha-596825" target="_blank">James Ha</a>, Associate, <a href="http://theconversation.com/institutions/grattan-institute-1168" target="_blank">Grattan Institute</a>
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/three-charts-on-why-congestion-charging-is-fairer-than-you-might-think-124894" target="_blank">original article</a>.
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jrobinson-rf4aSBido9

Three charts on why congestion charging is fairer than you might think

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<img src="https://counter.theconversation.edu.au/content/65027/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
Road user charging is probably the best idea we have to reduce congestion and to enable better decisions on road investment. Average travel speeds in our cities are decreasing, and congestion is only likely to worsen as our population continues to grow.
Urban Infrastructure Minister Paul Fletcher recently gave an important speech, albeit largely unnoticed, in which he made the case for a universal road user charging scheme. Charging people to drive has previously been the dream of transport and economic policy wonks – serving politicians tend to see the idea as political poison.
Fletcher trod gently, cautioning his Sydney Institute audience that “there is a lot of work to do” and that any move in this direction would be “a ten to 15-year journey”. It is still remarkable that a federal minister even took these first steps. 
Fletcher warned of the potential impact of electric vehicles on fuel excise revenue, but automated vehicles represent an even bigger change.
The future of road use is made unclear by the looming arrival of these vehicles. Despite predictions that these could be the answer to traffic congestion, complications include the interaction of autonomous and traditional vehicles and the complexities of human behaviour.
Autonomous vehicles could even lead to greater congestion. The ease of travel in these vehicles might encourage travellers to take more trips as they reduce the time cost of being stuck in traffic by being able to read emails and stay connected while the car drives itself. Empty vehicles travelling to pick up goods and passengers could further clog roads.
Thus it is prudent to target road congestion now, especially when current strategies aren’t helping much. Building more road capacity or even improving public transport can’t solve congestion.
The best strategy is management of demand via a pricing mechanism that reflects the cost of the congestion caused by one more vehicle on the road. With prices that vary by location, time of day and distance travelled, such a scheme would encourage people to take non-essential trips at a different time, or not at all.
The charge could be efficient, as the trips that are discouraged are those for which the congestion caused outweighs the benefit derived. And it would be fair: drivers adding to the delay faced by others pay more, while those who drive in non-congested areas or at non-peak times pay less.
The ability to observe road users’ willingness to pay for road space will also give a better signal to planners of where additional road capacity will be of value to the community. 
<h2>Don’t treat it as a revenue raiser</h2>
So Fletcher deserves plaudits for raising the issue. But he got one important thing wrong: he said that the fuel excise tax funds road spending.
Pointing out that fuel excise receipts would fall with the advent of more fuel-efficient vehicles, and electric cars in particular, he argued for a road user charging scheme on the ground that it would raise revenue for road spending.
Linking fuel excise to road funding is a furphy and gets us onto the wrong track at the very start of the road-pricing journey. Fuel excise is merely one source of general government revenue and is not in any way hypothecated, meaning pledged by law to be spent on a specific purpose – in this case roads.
It is no more relevant to say that falling excise revenues will put road funding under pressure than it is to say this will put pressure on health spending or the age pension.
Furthermore, about 75 percent of road funding comes from state and local government revenue, while fuel excise is a federal tax. It is true that falling fuel excise receipts would add to the federal government’s deficit problems. But there is no reason why a loss of fuel excise revenue must be replaced by another charge on motorists, or why motorists alone should fund additional road spending.
<h2>Take care to avoid an inefficient, distorting tax 
</h2>
The government should take a holistic approach to repair its pressured budget. It should restrict the most wasteful spending, wherever it is, and introduce or increase the most efficient, fair and simple taxes. It is not helpful to limit our thinking to motorist-based taxes to solve that part of the budget problem caused by falling fuel excise receipts.
The other problem with introducing road user charging as a revenue raiser rather than a congestion reducer is that a scheme designed on those terms is likely to produce poor results.
If we approach the task asking how we can maximise revenue, we’ll end up with charges on the wrong roads, at the wrong times, priced to maximise financial return rather than optimise congestion. For example, we might charge heavily on major roads, just to increase revenue, when some targeted charges on minor roads might do more to reduce traffic. In short, we’ll have one more inefficient, distorting tax.
So kudos to the minister for opening the debate. Let’s talk about road user charging, but let’s talk about what it should really achieve.
If we start by asking the right questions, road user charging could be the best congestion management policy we’ve seen in Australia. It could improve the driving experience without the need for big spending on more road capacity, and make sure we get the most economic and social value from our roads.
Marion Terrill is transport program director, Grattan Institute and author for The Conversation. She can be contacted <a href="https://theconversation.com/profiles/marion-terrill-169480" target="_blank">here</a>.
Owain Emslie is associate, Grattan Institute and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/owain-emslie-250445" target="_blank">here.</a>
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jchancellor-FAypfDUnLy

Road user charging belongs on the political agenda as the best answer for congestion management

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GUEST OBSERVER
Most mathematical modelling used to guide our economy is simplified and only modified when it becomes so out of touch that it is dangerous.
When the Atlantic cod fishery collapsed the model being used to set fishing quotas was still suggesting the fishery was healthy. In retrospect it seems a kind of madness to have kept using it.
Traffic modelling in Australia is now similarly out of touch. A recent study by the Bureau of Transport Industry and Resource Economics modelled the future of traffic in Australian cities. If it had been a mere academic study it would not be dangerous, but it is now being used to justify massive road spending.
The report suggests that travel times will blow out and road congestion will cost the economy more than A$50 billion. Congestion, it seems, is out of control and will engulf us all, with terrible economic consequences for Australian cities.
<h2>Modelling relies on heroic growth assumptions</h2>
In order to reach these numbers the report had to make assumptions about growth trends in car use per capita. The high-growth scenario is included in the red box in Figure 1 below.
<a href="/images/2016/01/18/image-20160113-8411-b2a1bi.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/01/18/image-20160113-8411-b2a1bi.jpg" alt="">
As is common in such modelling, a low-growth scenario is also modelled and then the future is taken to be in the middle.
The high-growth scenario can be seen to reverse a trend in car use per capita that appeared to be well set after a peak in 2003-04. This peak car phenomenon has been found in all developed cities and has been analysed by many commentators including ourselves.
Understanding the peak car phenomenon would appear to be a basic requirement before attempting future scenarios that wipe it out completely. However, this report has not ventured into such questions. Instead, it continues the methodology used for the past 30 years.
<h2>Travel time reality means car use has peaked</h2>
The fundamental problem is that the model does not understand how cities work. Travel time is seen as something that just expands as our cities of car-dependent suburbs grow outwards.
However, the Marchetti travel time budget of just over an hour on average has been found to apply universally across all cities. Some people can go beyond an hour and some much less, but the average everywhere is an hour. This has been found over and over to apply in every city.
If people find it hard to live with so much time “wasted”, they move to somewhere more within their travel time budget. If the overall options in housing, jobs and travel become so dysfunctional that people are forced to travel beyond their time budget then the issue becomes highly political: elections are fought over infrastructure and housing options. Cities adjust; they don’t keep expanding travel time.
It is possible to understand the global peak car phenomenon in terms of cities hitting the Marchetti wall. In our data, cities everywhere began to grow in their traffic congestion whether or not they built freeways or extra road capacity. This was because these just filled very quickly.
<h2>Rail projects unclog the urban arteries</h2>
Rail projects, however, could go around, over or under the traffic. Hence, over the past 30 years, rail lines have become more travel-time-efficient than traffic arteries. Many people, especially the young and wealthy, began to move back into areas where public transport was well provided.
The rejuvenation of central and inner areas is not just because they are cool and trendy but because they offer reduced travel time. Car use per capita goes down when there is less need to travel, especially by car.
This model does not consider this to be significant enough to consider in forecasting scenarios for Australian cities. It crudely projects a totally car-based-and-growing set of futures. It barely considers the remarkable global turnaround in the building of rail systems and the rejuvenation of cities.
Scenarios where these urban trends are considered to continue (rather than suddenly dying as suggested by Figure 1, followed by inevitable growth in car use) would make much more sense. This is the way planning is being done in cities like London.
The evidence in London and other cities – with good public transport alternatives and competitive door-to-door journey times – is that with fixed road capacity traffic volumes stay constant (or slightly decline). All the growth goes on to public transport and the car-based share of travel falls – down from 46% for residents of London in the 1990s to 32% now.
The scenarios for London are therefore all about how best to build public transport and land-use options that can enable economic growth to occur sustainably, rather than trying to increase road capacity. Similar considerations can be seen to be happening elsewhere around the world.
<h2>Did an ‘Abbott effect’ skew the modelling?</h2>
So why have we refused to change our modelling and are still trying to justify massive road capacity increases?
Traffic modelling reports like this take about two years to produce. What was happening around two years ago was the election of Tony Abbott with his commitment to spend some A$40 billion on urban roads and nothing on urban rail.
Huge road projects in Melbourne (East-West Link), Sydney (West Connex), Brisbane (Gateway) and Perth (Freight Link) were all announced before any assessment. Their rationale was very shaky and most of these projects have now either failed or are failing.
Each road project also has large impacts on their urban economies. These are dangerous as they destroy so much of the urban fabric necessary for rejuvenation and take away the ability of governments to pay for the more important urban rail projects on their agendas.
The upturn in the graphs in Figure 1 seems to be an Abbott effect. It is rather amusing now that this report came out just as Malcolm Turnbull took over and began talking up urban rail and urban regeneration.
Such models should be put into the museum and as a better sense of where our cities can be going. This report can be easily passed over, but if the thinking behind it stays the impact on our cities will be very damaging.
 
Peter Newman is professor of sustainability, Curtin University and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/peter-newman-1858" target="_blank">here</a>.
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