Distance and time based road pricing trial in Dublin

The objective of the work was to evaluate the potential user response to distance and time based road pricing of a sample of individuals drawn randomly from a group of volunteers in Dublin. The road use pricing charge levels were selected to match the marginal external costs of car transport i.e. those costs not currently paid by the car user. Such costs include marginal external costs of congestion, air pollution and noise. The project formed part of the EU DGXVII EUROPRICE project where one of the objectives was to evaluate the impact of road use pricing on private transport demand. Estimates of the marginal external costs of car travel had been previously made for Dublin in an EU DGVII project entitled TRENEN II STRAN and the results were used to select the road pricing charges in the trial. The distance travelled and travel time of a particular individual's work trip were noted. Charges per unit distance and time were applied so that the individual would incur a total charge for their average peak period work trip of 6.4 euro; the average marginal external cost of a peak period trip in Dublin, as estimated by the TRENEN model. Although the sample of individuals was relatively small, the indications from the results are worthy of note and further investigation on a larger sample. A significant reduction in the number of peak period trips was evident, of the order of 22%, resulting from trip suppression and transfer to other modes. This revised version was published online in June 2006 with corrections to the Cover Date.     

The marginal external costs of urban transport

A necessary input for the analysis of efficient transport policies is the marginal external cost of each transport mode. This paper studies the marginal external costs of urban transportation. These include the marginal external cost of congestion, accidents, air pollution and noise. The costs are computed for cars, buses, trams, metro and trucks. The methodology is described and applied to the urban area of Brussels for the year 2005.     

Refocusing the Modelling of Freight Distribution: Development of an Economic-Based Framework to Evaluate Supply Chain Behaviour in Response to Congestion Charging

The distribution of freight is a major contributor to the levels of traffic congestion in cities. However it is much neglected in the research and planning activities of government, where the focus is disproportionately on passenger vehicle movements. Despite the recent recognition of the contribution of freight transportation to the performance of urban areas under the rubric of city logistics, we see a void in the study of how the stakeholders in the supply chain might cooperate through participation in distribution networks, to reduce the costs associated with traffic congestion. Given that transport costs are typically over 45 of all distribution costs, with congestion a major contributor in the urban setting, the importance of establishing ways in which supply chain partnerships might cooperate to reduce levels of freight vehicle movements has much merit. This paper sets out a framework to investigate how agents in a retail supply chain might interact more effectively to reduce the costs of urban freight distribution. We propose an interactive agency choice method as a way of formalising a framework for studying the preferences of participants in the supply chain to support specific policy initiatives. Such a framework is a powerful way of investigating the behavioural response of each agent to many policies, including congestion pricing, as a way of improving the efficient flow of traffic in cities.     

Optimization of tunnel tolls in land use and transport planning

The task of transport planning is to determine cost-effective methods of providing and improving mobility, which can include minimizing traffic congestion. A cost-effective solution to transport problems should consist of a land use pattern, a transport system an a set of road pricing policies that together bring demand and supply into balance in an efficient and equitable way. The conventional approach aimed to produce comprehensive, long-term plans for land use and transport in considerable detail, but tended to ignore the role of road pricing policy, thus ending up with solutions that might not be efficient or economical. This feature of sub-optimal road pricing policy is accentuated by the overall growth in car use, which has generated problems with the efficient use of road space. This paper presents a computer analysis system (or model) which will enable the analysis of coordinated tunnel toll pricing policies by optimising an “objective function” while satisfying the associated and other constraints. The possibility of integrating the optimal road pricing policies in the land use and transport planning are discussed. A case study based on Hong Kong data demonstrates the efficiency of optimizing tolls on two of the three harbour crossing tunnels in Hong Kong.     

Road pricing — an outsider's view of American experiences

Abstract

Substantial changes in urban transport policy have taken place over the past decade. The concern with expanding infrastructure and the preoccupation with providing sufficient road capacity to meet the increasing demand of unrestricted car use, which characterized transport policy in the 1950s and 1960s, has gradually given way to the idea that there is a need to restrain motor traffic if urban society is to function efficiently. A variety of restrictive physical traffic management, land use planning and economic policies have, in consequence, been pursued. One option which has attracted considerable attention in the academic literature, but which has been received more cooly by policy‐makers, is the possibility of optimizing urban traffic congestion through the imposition of road pricing. The introduction and relative success of the area licensing scheme in Singapore has added fuel to the arguments of the advocates of such a policy. This review is not directly concerned with either the experiment with road pricing in Singapore nor the theoretical debates which have taken place concerning the potential merits and defects of such policies but rather looks at the applied work in the United States which has looked into the practical implications of road pricing for its cities. Further, it seeks to explore, again drawing on American experiences, just why there has been so much opposition to the employment of economic pricing principles in the urban road transport market. The author presents the results of an SSRC sponsored study into the practical problems of introducing road pricing to cities in the United States.     

Marginal costs of freeway traffic congestion with on-road pollution exposure externality

The health cost of on-road air pollution exposure is a component of traffic marginal costs that has not previously been assessed. The main objective of this paper is to introduce on-road pollution exposure as an externality of traffic, particularly important during traffic congestion when on-road pollution exposure is highest. Marginal private and external cost equations are developed that include on-road pollution exposure in addition to time, fuel, and pollution emissions components. The marginal external cost of on-road exposure includes terms for the marginal vehicle’s emissions, the increased emissions from all vehicles caused by additional congestion from the marginal vehicle, and the additional exposure duration for all travelers caused by additional congestion from the marginal vehicle. A sensitivity analysis shows that on-road pollution exposure can be a large portion (18%) of marginal social costs of traffic flow near freeway capacity, ranging from 4% to 38% with different exposure parameters. In an optimal pricing scenario, excluding the on-road exposure externality can lead to 6% residual welfare loss because of sub-optimal tolls. While regional pollution generates greater costs in uncongested conditions, on-road exposure comes to dominate health costs on congested freeways because of increased duration and intensity of exposure. The estimated marginal cost and benefit curves indicate a theoretical preference for price controls to address the externality problem. The inclusion of on-road exposure costs reduces the magnitudes of projects required to cover implementation costs for intelligent transportation system (ITS) improvements; the net benefits of road-pricing ITS systems are increased more than the net benefits of ITS traffic flow improvements. When considering distinct vehicle classes, inclusion of on-road exposure costs greatly increases heavy-duty vehicle marginal costs because of their higher emissions rates and greater roadway capacity utilization. Lastly, there are large uncertainties associated with the parameters utilized in the estimation of health outcomes that are a function of travel pollution intensity and duration. More research is needed to develop on-road exposure modeling tools that link repeated short-duration exposure and health outcomes.     

Effect of advanced traveler information systems and road pricing in a network with non-recurrent congestion

The effect of the application of advanced transport information system (ATIS) and road pricing is studied in a transportation system under non-recurrent congestion. A stochastic network deterministic user equilibrium model (SNDUE) with elastic demand is formulated and used to evaluate the welfare and private impacts of different market penetrations of ATIS, together with road pricing for a simple network. Both marginal first-best road pricing and a second-best fixed road pricing are considered. The incentives of private users to use ATIS are analyzed and the characteristics of optimum tolls as a function of ATIS market penetration are shown. We conclude that ATIS is an efficient and necessary tool to reduce the effects of non-recurrent incidents in a transportation network, especially when non-recurrent congestion causes a significant deterioration of operational conditions of the network. If the impact of non-recurrent incidents on free flow costs is small or is reduced only to congestion effects, the use of road pricing would be more efficient. Social benefits obtained when jointly implementing ATIS and road pricing are practically the same whether first-best or second-best road pricing is used. Considering the private costs perceived by the network users, and the benefits experienced by equipped users, the maximum level of market penetration achieved could be limited because private benefits disappear after certain market penetration is obtained.     

Estimating commuter mode choice: A discrete choice analysis of the impact of road pricing and parking charges

Automobile use leads to external costs associated with emissions, congestion, noise and other impacts. One option for minimizing these costs is to introduce road pricing and parking charges to reduce demand for single occupant vehicle (SOV) use, while providing improvements to alternatives to encourage mode switching. However, the impact of these policies on urban mode choice is uncertain, and results reported from regions where charging has been introduced may not be transferable. In particular, revealed preference data associated with cost recovery tolls on single facilities may not provide a clear picture of driver response to tolls for demand management. To estimate commuter mode choice behaviour in response to such policies, 548 commuters from a Greater Vancouver suburb who presently drive alone to work completed an individually customized discrete choice experiment (DCE) in which they chose between driving alone, carpooling or taking a hypothetical express bus service when choices varied in terms of time and cost attributes. Attribute coefficients identified with the DCE were used in a predictive model to estimate commuter response to various policy oriented combinations of charges and incentives. Model results suggest that increases in drive alone costs will bring about greater reductions in SOV demand than increases in SOV travel time or improvements in the times and costs of alternatives beyond a base level of service. The methods described here provide an effective and efficient way for policy makers to develop an initial assessment of driver reactions to the introduction of pricing policies in their particular regions.     

Accelerating the transformation to a low carbon passenger transport system: The role of car purchase taxes,feebates, road taxes and scrappage incentives in the UK

The transition to a low carbon transport world requires a host of demand and supply policies to be developed and deployed. Pricing and taxation of vehicle ownership plays a major role, as it affects purchasing behavior, overall ownership and use of vehicles. There is a lack in robust assessments of the life cycle energy and environmental effects of a number of key car pricing and taxation instruments, including graded purchase taxes, vehicle excise duties and vehicle scrappage incentives. This paper aims to fill this gap by exploring which type of vehicle taxation accelerates fuel, technology and purchasing behavioral transitions the fastest with (i) most tailpipe and life cycle greenhouse gas emissions savings, (ii) potential revenue neutrality for the Treasury and (iii) no adverse effects on car ownership and use.The UK Transport Carbon Model was developed further and used to assess long term scenarios of low carbon fiscal policies and their effects on transport demand, vehicle stock evolution, life cycle greenhouse gas emissions in the UK. The modeling results suggest that policy choice, design and timing can play crucial roles in meeting multiple policy goals. Both CO₂ grading and tightening of CO₂ limits over time are crucial in achieving the transition to low carbon mobility. Of the policy scenarios investigated here the more ambitious and complex car purchase tax and feebate policies are most effective in accelerating low carbon technology uptake, reducing life cycle greenhouse gas emissions and, if designed carefully, can avoid overburdening consumers with ever more taxation whilst ensuring revenue neutrality. Highly graduated road taxes (or VED) can also be successful in reducing emissions; but while they can provide handy revenue streams to governments that could be recycled in accompanying low carbon measures they are likely to face opposition by the driving population and car lobby groups. Scrappage schemes are found to save little carbon and may even increase emissions on a life cycle basis.The main policy implication of this work is that in order to reduce both direct and indirect greenhouse gas emissions from transport governments should focus on designing incentive schemes with strong up-front price signals that reward ‘low carbon’ and penalize ‘high carbon’. Policy instruments should also be subject to early scrutiny of the longer term impacts on government revenue and pay attention to the need for flanking policies to boost these revenues and maintain the marginal cost of driving.     

A decision analysis framework for intermodal transport: Comparing fuel price increases and the internalisation of external costs

This paper presents the impact of fuel price increases on the market area of intermodal transport terminals. Aim of this research is to determine whether an increase in fuel prices is sufficient enough to raise the market area of intermodal transport to the same degree that would be accomplished by stimulating intermodal transport through policy instruments. Therefore, several fuel price scenarios are analysed in order to verify the impact of different fuel price evolutions on the market area of unimodal road transport compared to intermodal transport in Belgium. The LAMBIT-model (Location Analysis for Belgian Intermodal Terminals), which is a GIS-based model (Macharis and Pekin, 2008), is used to analyse the different fuel price increases and enables a visualisation of the impact on the market area. The LAMBIT model incorporates the different network layers for each transport mode by setting up a GIS network that includes four different layers: the road network, the rail network, the inland waterways network and the final haulage network. The geographic locations of the intermodal terminals and the port of Antwerp are added as nodes in the network and the Belgian municipality centres are defined and connected to the different network layers. Based on the different fuel price scenarios representing respectively a fuel price increase with 10% (low price case), 50% (business as usual case) and 90% (high price case), the results of the LAMBIT model show that the market areas rise in favour of intermodal barge/road and intermodal rail/road. Depending on the scenario, the degree of modal shift however differs. Additionally, in order to compare policy measures with the effect of a fuel price increase, the internalisation of the external costs is analysed with the LAMBIT model. For some years, the European Commission is supporting the idea that transportation costs should reflect the true impacts on environment and society, and is relentlessly pushing towards the so called ‘internalisation of external costs’ as a policy instrument in order to establish fair and efficient pricing of different transport modes. This requires monetarizing the external effects of transport and adding them to the already internalized costs in order to give the correct price signals. Results of this comparative analysis performed with the LAMBIT model are also presented in this paper.     

Estimating the marginal cost of railway track renewals using corner solution models

Economic theory advocates marginal cost pricing for efficient utilisation of transport infrastructure. A growing body of literature has emerged on the issue of rail marginal infrastructure wear and tear costs, but the majority of the work is focused on costs for infrastructure maintenance. Railway track renewals are a substantial part of an infrastructure manager’s budget, but in disaggregated statistical analyses they cause problems for traditional regression models since there is a piling up of values of the dependent variable at zero. Previous econometric work has sought to circumvent the problem by aggregation in some way. In this paper we instead apply corner solution models to disaggregate (track-section) data, including the zero observations. We derive track renewal cost elasticities with respect to traffic volumes and in turn marginal renewal costs using Swedish railway renewal data over the period 1999–2009. This paper is the first attempt in the literature to apply corner solution models, and in particular the two-part model, to disaggregate renewal cost data in railways. It is also the first paper that we are aware of to report usage elasticities specifically for renewal costs and therefore adds important new evidence to the previous literature where there is a paucity of studies on renewals and considerable uncertainty over the effects of rail traffic on renewal costs. In the Swedish context, we find that the inclusion of marginal track renewal costs in the track access pricing regime, which currently only reflects marginal maintenance costs, would add substantially to the existing track access charge. EU legislation requires that access charges reflect the ‘costs directly incurred as a result of operating the train service’, which should include a marginal renewal cost component. This change would also increase the cost recovery ratio of the Swedish infrastructure manager, thus meeting a policy objective of the national government.     

Institutional constraints on transport policymaking: the case of company cars in Israel

Transportation analysis emphasizes the necessity to internalize the transport externalities of car usage through taxation. Yet taxation decisions are often made with non-transport goals in mind. In such cases, transport policies are made ‘by the way.’ This paper examines such a case: Israel’s taxation policy on company cars. It shows that current taxation policies result in increasing numbers of company cars and growing numbers of transport users who are not sensitive to the marginal cost of car use and make excessive use of the car. As a result, a significant portion of Travel Demand Management (TDM) measures cannot affect this group. The Israeli case of company car tax reform demonstrates the problematic effect of a policy that does not take its overall consequences on other policy fields into account and thereby impairs efforts to reduce the negative impacts of the transport system. Also, it demonstrates the importance of institutional aspects of transport policymaking.

Road pricing with complications

The rationale for congestion charges is that by internalising the marginal external congestion cost, they restore efficiency in the transport market. In the canonical model underlying this view, congestion is a static phenomenon, users are taken to be homogenous, there is no travel time risk, and a highly stylised model of congestion is used. The simple analysis also ignores that real pricing schemes are only rough approximations to ideal systems and that inefficiencies in related markets potentially affect the case for congestion charges. The canonical model tends to understate the marginal external congestion cost because it ignores user heterogeneity and trip timing inefficiencies. With respect to the relevance of interactions between congestion and congestion charges and tax distortions and distributional concerns, recent insights point out that there is no general case for modifying charges for such interactions. Therefore the simple Pigouvian rule remains a good first approximation for the design of road charging systems.     

A monopolistic market for advanced traveller information systems and road use efficiency

Advanced traveller information systems (ATIS) are likely to exhibit significant economies of scale in production and operation. Private provision would therefore typically occur under considerable market power. An important policy question is whether the resulting distortions would aggravate or reduce distortions in the transport market itself, notably external effects such as congestion. We consider such questions by presenting an integrated model that captures the interactions between a congested transport market and a monopolistic market for advanced traveller information systems (ATIS). Three market failures operate simultaneously: congestion on the road, a declining average benefit of information when information penetration rises, and monopolistic pricing by the provider of information. Some key results are as follows. Monopoly information pricing appears not to be the most attractive option from a system efficiency viewpoint. A subsidy in the information market can help realise a second-best optimum of road use. Relatively low uncertainty on the road and high information costs limit the monopolist’s profit on the information market, as well as relative system efficiency. While relatively inelastic demand for mobility, counter intuitively, negatively affects the monopolist’s profit, the relative social benefits from private information peak at intermediate demand elasticities.     

The influence of personality on acceptability of sustainable transport policies

Previous research has shown that fairness, infringement on freedom, and perceived effectiveness are determinants of transport pricing acceptability. In the present study we investigate determinants of acceptability of environmental (carbon) taxation for which trust in government and environmental concern are additional determinants. Carbon taxation is an extension of fuel taxes and may thus be viewed as transport pricing. Our main focus is on the role played by personality traits. Structural equation modeling reveals that acceptability is related to the personality traits extraversion, agreeableness, and conscientiousness. Extraverted individuals have higher levels of trust in government which leads to higher acceptability. Also correlations between agreeableness and conscientiousness as well as environmental problem awareness and personal norm are observed. We discuss strategies for effective marketing of transportation policies considering how acceptability is related to personality traits.     

On a pathway to de-carbonization – A comparison of new passenger car CO2 emission standards and taxation measures in the G20 countries

Considering the role of transport for a 1.5 Degree stabilization pathway and the importance of light-duty vehicle fuel efficiency within that, it is important to understand the key elements of a policy package to shape the energy efficiency of the vehicle fleet. This paper presents an analysis focusing on three types of policy measures: (1) CO₂ emission standards for new vehicles, (2) vehicle taxation directly and indirectly based on CO₂ emission levels, and (3) fuel taxation. The paper compares the policies in the G20 economies and estimates the financial impact of those policies using the example of a Ford Focus vehicle model. This analysis is a contribution to the assessment of the role of the transport sector in global decarbonisation efforts. The findings of this paper show that only an integrated approach of regulatory and fiscal policy measures can yield substantial efficiency gains in the vehicle fleet and can curb vehicle kilometres travelled by individual motorised transport. Using the illustrative example of one vehicle model, the case study analysis shows that isolated measures, e.g. fuel efficiency regulation without corresponding fuel and vehicle taxes only have minor CO₂ emission reduction effects and that policy measures need to be combined in order to achieve substantial emission reduction gains over time. The analysis shows that the highest level of impact is achieved by a combination regulatory and fiscal policies rather than only one policy even if this policy is more aggressive. When estimating the quantitative effect of fuel efficiency standards, vehicle and fuel tax, the analysis shows that substantial gains with regard to CO₂ emission are only achieved at a financial impact level above 500 Euros over a four year period.     

Learning from Los Angeles: transport,urban form,and air quality

Los Angeles is well known around the world as an automobile-oriented low density community, yet recent transportation policies have emphasized greater capital investment in rail transportation than in highways, and recent policies have attempted to discourage automobile usage through transportation demand management. While these policies have accomplished small shifts toward public transport and somewhat lower dependence upon singly occupied automobilies for work commuting, the financial costs of these policy changes has been very large in relation to their benefits. Proper pricing of transportation alternatives, more creative use of new and emerging transportation technologies, and the provision of many more opportunities for simpler private sector transport services, would all appear to be more promising as cost-effective approaches to coping with congestion in Los Angeles than the current regional transportation policies.     

A framework for evaluating the dynamic impacts of a congestion pricing policy for a transportation socioeconomic system

This paper provides a modeling framework based on the system dynamics approach by which policy makers can understand the dynamic and complex nature of traffic congestion within a transportation socioeconomic system representation of a metropolitan area. This framework offers policy makers an assessment platform that focuses on the short- and long-term system behaviors arising from an area-wide congestion pricing policy along with other congestion mitigation policies. Since only a few cities in the world have implemented congestion pricing and several are about to do so, a framework that helps policy makers to understand the impacts of congestion pricing is currently quite relevant. Within this framework, improved bus and metro capacities contribute to the supply dynamics which in turn affect the travel demand of individuals and their choice of different transportation modes. Work travel and social networking activities are assumed to generate additional travel demand dynamics that are affected by travelers’ perception of the level of service of the different transportation modes, their perception of the congestion level, and the associated traveling costs. It is assumed that the, population, tourism and employment growth are exogenous factors that affect demand. Furthermore, this paper builds on a previously formulated approach where fuzzy logic concepts are used to represent linguistic variables assumed to describe consumer perceptions about transportation conditions.     

External costs of the Belgian interurban freight traffic: a network analysis of their internalisation

The strong expansion of freight road transports throughout Europe is an important source of congestion and pollution, as well as a cause of many accidents. To solve this problem will require the conjunction of many different remedies. One element of solution would be the promotion and substitution of transportation modes with less negative effects. This paper is focused on this solution. It presents some results obtained from a detailed GIS modelling of the Belgian multimodal freight transport network inserted within the overall trans-European network. It outlines the results of a simulation of the flows over the Belgian network in 1995 which allows to estimate some of the costs of several external effects of freight transports: the costs of pollution, congestion, accidents, noise and road damages. This paper provides also the simulated impacts on modal choice of a marginal external cost internalisation, and an estimation of the corresponding external cost savings.