Would Congestion Pricing In Australia Really Work To Reduce Traffic?
The history of Australian transport planning is littered with plans to move people from private cars to public and active transport. Some of these have been overnight successes, others dramatic failures. Most have fallen somewhere in between.
Congestion pricing is one of the latest of these ideas. With real world examples of successful implementations and at least one major US city preparing to launch its own version, the future looks bright for this brand of road-use pricing.
So is congestion pricing destined to be a staple in our cities? Or would congestion pricing in Australia just add to the scrap heap of well-intentioned projects?
At its simplest, congestion pricing is a toll charged to motorists when they drive in a congested area, typically a city’s downtown core or Central Business District (CBD). This reduces the demand for driving in these congested areas. Most congestion pricing systems charge drivers in a similar way to how road tolls work in Australia. Drivers have an electronic tag in their car that tracks when they pass into specific zones. Toll roads could even be considered a kind of micro-congestion charge.
The most famous example of congestion pricing comes from London, which has charged drivers to enter the CBD since 2003. Between 7am and 6pm on weekdays, cars entering London’s downtown core are charged £11.50 (around $20 AUD) to incentivise commuters to take public or active transport, or to travel in off-peak times.
London’s congestion charge has been very successful. Traffic volume in the charging zone was 22% lower in 2017 than in the previous decade, and the number of private cars entering the London CBD fell by 39% between 2002 and 2014. In 2014, 45% of trips were made with public transport, an increase of 10.5% from the early 2000’s.
Over the past twenty years, congestion pricing has generally been found to be more effective in reducing traffic congestion than simply increasing the amount of road space available. In fact, thanks to the principles of induced demand, building new roads actually increases congestion.
As a result of its success, congestion pricing is back on the agenda – New York City will introduce congestion pricing from 2021. New York Governor Andrew Cuomo says the scheme could generate $15 billion over five years, which would be used to upgrade the New York City’s ageing subway system.
While congestion pricing has a history of success, it’s not all positive, and schemes can have unintended consequences. Singapore’s 1990’s car restriction efforts led to a heated market for Certificates of Entitlements – essentially car ownership permits – that were often the price of a new car. Because those who could afford to drive had spent so much for the privilege, many drove as much as possible, increasing congestion.
Today, London’s congestion charge is beginning to show its age. Transport trends have changed considerably since 2003, especially with the arrival of rideshare. Unlike car share networks (like GoGet) that directly remove private cars from the road, rideshare services like Uber have been responsible for increasing traffic congestion. London is now updating its congestion charge, such as charging private rental cars like Uber, but more changes will be needed in the future.
Congestion pricing can also create equity issues, as people with lower incomes tend to have less access to public transport and rely on their cars more. Conversely, more economically well-off individuals have greater access to public transport, and are less affected by financial disincentives. That said, Australia’s current road funding mix of fuel excise and registration charges are even more regressive, so a balanced road-use pricing scheme would likely represent a more equitable arrangement than the status quo.
Congestion pricing is also a difficult policy to enact politically. Private car ownership is still the norm in most big cities (especially in Australia), so a new tax that singles out drivers is unlikely to be popular. As a result, congestion pricing is normally a reactive policy, only gaining support once congestion reaches crisis point.
So, would congestion pricing work in Australia? On a purely practical level, the short answer is yes. Simulated road-use pricing in Melbourne found a financial disincentive to unwanted driving behaviours significantly reduced distance travelled. However, there are different models of road-use pricing, and one Australian city may benefit more from a different system than another.
Access to public transport is also a major part of the equation. Disincentivising driving with no viable alternative won’t reduce congestion, and could be seen as cynical revenue raising. Directing revenue from tolls to fund public transport infrastructure is a good policy that should increase a scheme’s popularity, but adequate services need to be in place to facilitate people shifting to a new transport mode.
Any Australian congestion charge would also need to be flexible. In order to account for our changing transport mix, policy makers need the flexibility to adjust what falls under the scheme. The congestion reduction of vehicle types (eg trucks and motorbikes) and of schemes like car share should be considered. Breaks in congestion charges could represent a simple way to incentivise the growth of more sustainable private car alternatives like these.
So yes, congestion pricing could have serious benefits in Australia. It could make a significant dent in already congested cities like Sydney and Melbourne, while preventing a congestion explosion in smaller cities like Brisbane, Adelaide, and Perth, as long as the growth of public transport infrastructure is prioritised. There’s no reason to think Australian cities couldn’t realise the gains that cities like London and Singapore have.
However, for any scheme to be practically and politically successful, it would need considerable planning, research, and public consultation. The potential benefits are well worth the cost, with just a 5% reduction in traffic causing a 50% boost to average travel speed. Congestion pricing is no magic bullet, and a holistic approach will require multiple approaches need to be woven together (we’ll have more to say on this soon) – but a well executed road-use charge would almost certainly lead to a cleaner, healthier, happier city.