Wednesday, February 27, 2008

Misuse of Congestion Pricing

Motorists in Central London have incurred a congestion charge for some time, paying £8 per day to drive within the central area. The scheme is generally regarded as a great success, with cities around the world looking to emulate it and the UK considering a nationwide congestion charge scheme to replace the current road fund license.

London’s controversial mayor. Ken Livingstone, now plans to increase the charge for high-emission vehicles (those emitting more than 225 grams per kilometer of CO2) to £25 per day.

The Financial Times last Wednesday reported that Porsche is planning a legal challenge to the plan. It also reports that owners of high-emission vehicles who live within the congestion zone will no longer get the 90% discount which means they currently pay only 80 pence per day. This is however a little misleading, because the discount applies only if one pays quarterly. Non-residents by contrast have to pay daily if they drive within the zone. So, without the discount the residents will be in the same situation as non-residents and will pay only if they use their cars.

So whose side am I on? Having only two levels of charge separated by a factor of 3 seems too blunt an instrument. And an additional £17 seems excessive, given that an appropriate carbon tax would probably add only something like 25 pence to a gallon of gas. It is hard to use 68 gallons of gas per day in central London, even in a 911! But my main objection is that the original purpose was to tax congestion rather than greenhouse gas emissions, which are not a problem local to central London. I think Ken should stick to the original purpose, and let the UK or indeed the EU worry about emissions.


FixedXorBroken said...

You're forgetting air quality concerns. These big cars put much more smog into the air.

Big SUVs are also much less pleasant to be around for pedestrians and cyclists. A city like London should be doing as much to encourage active transportation as possible.

I'd also like to point out that there is absolutely no reason to drive a gigantic gas guzzling car, as opposed to a more economic model.

It is really surprising to me that someone who claims to give a damn about global warming would advise against restricting the use of gas guzzling vehicles. You don't happen to work in the auto industry, do you?

Tony Welsh said...
This comment has been removed by the author.
Tony Welsh said...

No I do not work for the auto industry and I hate SUVs for all sorts of reasons. I just feel that this particular restriction is an arbitrary subversion of a mechanism designed for a totally different purpose. It is arbitrary in several ways: firstly, the central London area is very small and not relevant to air quality in London let alone to climate change; secondly, having a single cut-off with a three-fold penalty for being on the wrong side of the line seems like a very blunt instrument.

I agree that there is no need to drive a gigantic car, especially in London and especially when most SUVs are actually rather small inside. But people do lots of things that are not necessary. Aruguably they do it to show off the fact that they can afford to, in which case the extra fee might turn them on!

But here is the real point: combating climate change needs buy-in from the public. If people get the impression that doing so is going to be very much more expensive than it really is then that public support may evaporate. Nobody believes that the cost to the environment of driving a gas-guzzler is anything like $17 a day.

FixedXorBroken said...

I think that they are also planning on expanding the area of the congestion pricing zone.

I see no problem with using heavy handed rules against the worst climate offenders. Maybe you could offer an example of a failure of such a policy.

Why do you think that using a congestion removal scheme to also decrease carbon dioxide emissions is a bad idea? It seems valid to me; I always assumed that one of the reasons to cut down on congestion was to decrease the amount of pollution being emitted.

Tony Welsh said...

(btw, the deletion of my previous comment was just because I corrected some typos.)

The congestion zone was recently enlarged, which was probably a mistake because it now includes far more residential areas and hence far more people who pay on the quarterly basis and therefore incur _zero marginal cost_ in using their cars. The area is still very small however from the point of view of air quality. I do not think there is any plan to enlarge it further, though there is a longer-range plan to price all road usage in the UK, charging per mile depending upon time of day and what road you are on.

In both schemes the purpose is to reduce congestion, and while there might be some environmental benefit from this the primary purpose is to reduce journey time for vehicles which really need to use the roads, for example for deliveries. The London scheme is credited with doing this even while many roads have been dug up for a major renovation of the water system. (Which was leaking and wasting a lot of water; so here is another environmental angle!)

Anyhow, my main objection remains as stated in the last paragraph of my previous comment. Action on climate change is largely driven by public opinion and it does no good to the cause to suggest that using an SUV in London does damage to the environment worth £17 per day when Stern and others come up with numbers in the range of 5 to 25 pence per gallon of petrol.

Even if one wants to charge more, petrol taxes are surely the easiest way to implement this, since this would apply everywhere and would also take into account how far one drives.

I am afraid I know of no examples of heavy handed rules against the worst climate offenders either failing or succeeding. In fact I cannot think of another measure like the one proposed. Nor am I necessarily suggesting it would fail, though it might if the rich regard the fee as a status symbol; I just think there might be unintended consequences.

RosInSheffield said...

See this on the BBC website:

It says "Scientists from two London colleges calculated that since 2003, 1,888 extra years of life had been saved among the city's seven million residents". This is becasue of the reduction in pollution (not CO2). So I say Go for it, Ken! Increase the congestion charge - to reduce the congestion in people's lungs.

Tony Welsh said...

Maybe air quality is a local issue for London after all, though the article does suggest that it is more of an issue on a wider scale. But 1888 years over 7 million people is only 2 hours or so each. Yes, I realise it's not spread evenly but I cannot imagine being on my death bed at 10 pm and thinking if only we'd got rid of the SUV's I could have made it to midnight!

While I am personally focused on climate change, I am all for doing something about polution in general. But if Ken wants to do this, I would prefer that it was not justified on climate change grounds.
The article does describe the gain as "modest" as well as "unexpected."

Tony Welsh said...

Two more thoughts on this:

1. If we are really to include health issues, the SUV probably loses far more hours of life due to its inherent unsafety.

2. If the high congestion price were to encourage people to live in the country, the net effect on climate would be severely adverse.