The equity considerations of Congestion Pricing

Lance Freeman's picture

Getting stuck in traffic is fast becoming one of those necessary evils that everyone complains about but seldom does anything about it. Or at least anything that seems terribly effective. Neither additional road building nor public transit seemed to have had a major impact on traffic congestion in places where these types of remedies have been attempted.

But there's no lack of ideas on how to solve the problem of congestion. Congestion pricing has been held up by some planners and economists as the closest thing to a panacea for solving our traffic woes. In the view of advocates of congestion pricing, congestion is caused because travel on the most congested roads is too cheap-it's free. Without prices to tell drivers how much they should drive, they drive too much, or at least at the wrong times. With congestion pricing, drivers would have to pay tolls to drive at the most congested times, say rush hour, and in the most congested places, perhaps in the central business district or on heavily traveled highways. The tolls, if calibrated correctly, would discourage some drivers from driving on the most congested roads and at the most congested times. Voila! Congestion would be reduced considerably.

I'm not going to argue about the efficacy of congestion pricing for reducing traffic. As one would expect, when the price of something rises, consumption decreases. Studies have generally found that congestion pricing does reduce traffic. Congestion pricing, however, raises some serious equity issues. Problems severe enough that I suggest we not adopt congestion pricing unless they can be addressed.

Congestion pricing makes explicit the cost of driving on a heavily traveled roads and this is its' strength. Drivers are forced to take into consideration the cost they impose on others when they decide to drive, a cost that is easier to ignore when the roads are free. Congestion pricing is a regressive public charge, however, because the charges in no way take account of the driver's ability to pay. Congestion pricing might lead to a two tiered road network where with those with the means cruise about whenever and wherever they want, whereas the poor might be forced to take back roads or travel off peak.

But charging people on other transits modes is common and also regressive. Airlines and commuter rail lines typically charge higher price during peak travel times. Why should equity concerns be allowed to derail a strategy that could go along way toward reliving traffic congestion?

Well unlike airline travel, driving is a lot less discretionary for most folks. Most of us simply have to drive to get to work, to shop, etc. Congestion pricing would presumably push off the road those who don't have to be there. But what about those who have to drive on certain routes at certain times? Congestion pricing would be a real burden for poorer folks in these who lack flexibility in choosing their driving times and routes.

Congestion pricing also makes an incremental contribution to the effects of increasing wealth stratification of American society. For the past few decades income and wealth inequality have been increasing in America. In a society where relatively few resources like health care or access to good schools is allocated by the market, the trend of increasing wealth inequality is less troubling. But in the US we rely heavily on the market to allocate resources. Access to good neighborhoods, schools, and health care, for example, are increasingly tied to one's economic standing.

Congestion pricing would render everyday driving as one more part of life that is dependent upon one's economic standing. In a society where inequality is growing doing we really want to reinforce the impacts of this trend?

Lance Freeman is an associate professor of Urban Planning at Columbia University.

Comments

Comments

Not necessarily regressive

Just a few comments…. First in major cities aren't low income people the most likely group to use public transportation? Thus, in this instance low income people could actually benefit from congestion pricing schemes by shifting the costs of road construction and maintenance to high income people and away from general taxes which low income people contribute to. This would thus lower overall taxes by shifting them to highway users. Second, if congestion pricing revenues are returned to communities with highways running through them, then again low income people benefit since low income communities tend to be the communities with highways running through (ex. Beverly Hills vs. Inglewood) correct? Lastly, since congestion pricing generates revenues the communities with highways running through them could lower their taxes or shift the saved income to other areas such education or healthcare, all of which would benefit low income people. These schemes just might make congestion pricing politically viable and ensure that both low and high income people benefit. Now I realize this scheme still is not perfect, but it might just be politically palatable and better than the alternatives.

Ps… I wish I could say that these ideas are mine but frankly they are not… I learned about them from readings by Donald Shoup, my favorite planner/economist!

Regressive at what scale? is the question.

First, I'm not wholly convinced by the argumentation in this post, but I can hear what Mr Freeman is saying.

But it is true that public transportation as a mode to work: #1 takes far longer for most, and #2 does not serve all areas in most cities.

It is also true that auto transport as a primary mode costs lower income folks more as a fraction of income - damned if you do, damned if you don't in our society. Surely we must charge so folks making nondiscretionary trips during peak hours get off the road, but it certainly does impact the lower-income brackets.

I suggest to address Mr Freeman's (IMHO) valid concerns, it would be easy enough to set up some sort of program for tiered congestion pricing. We can make tiers fall according to last year's W-2s. Or we can have employers offer credits if one falls below a certain wage (which can be an inducement for employment at the McJob). We can charge less for certain arterials that lead to WalMart. We can charge less if your car is over 10 years old.

But we certainly should charge more for using the Yukon to ferry Trevor and Britney to soccer practice during afternoon peak.

Etc. You get the drift.

Best,

D

Lance Freeman's picture

One point I would emphasize

One point I would emphasize is that I am not against congestion pricing specifically. I just think given the rising ineaquality in America we should consider strategies to blunt any redistribution problems that arise from congestion pricing before implementing it.

Lance Freeman, Ph.D.
Associate Professor
Graduate School of Architecture, Planning and Preservation
Columbia University
400 Avery Hall
1172 Amsterdam Avenue
New York, NY 10027
Ph:212-854-8495
Fax:212-864-0410

Opposing Congestion Pricing Is Regressive

This post argues that congestion pricing could be regressive, because:

Congestion pricing might lead to a two tiered road network where with those with the means cruise about whenever and wherever they want, whereas the poor might be forced to take back roads or travel off peak.

The world currently has a two-tiered transportation system: about 20% of the people in the world have cars, and about 80% do not.

Our cars are a major source of American's greenhouse gas emissions. The latest forecasts say that, if we don't reduce greenhouse gas emissions dramatically, hundreds of millions of people will die because of drought and billions of people will be displaced because of drought before the end of the century. These people will overwhelmingly be in the poor countries of the world and - needless to say - they are among the people who do not have cars.

The post says that "Most of us simply have to drive to get to work, to shop, etc." But congestion pricing could help America reduce this auto dependency, if the revenue is used to fund transit, and if we encourage development around the new transit nodes. Instead, this post assumes that we will keep driving everywhere.

This post is titled "The equity considerations of Congestion Pricing," but it ignores the greatest inequity involved: the inequity between the affluent people of the world who drive everywhere (who use much more than their share of the world's resources and cause much more than their share of environmental damage) and the majority who do not drive (who will suffer most from global warming).

It seems that some people are more equal than others. Americans have an absolute right to drive as if there were no tomorrow, even if it means that the many of the poor people of the world die of famine.

Charles Siegel

opposition is not regressive

Charles writes:
"The post (Lance Freeman)says that "Most of us simply have to drive to get to work, to shop, etc." But congestion pricing could help America reduce this auto dependency, if the revenue is used to fund transit, and if we encourage development around the new transit nodes. Instead, this post assumes that we will keep driving everywhere.

The conditional terms you use are revealing. Yes, congestion pricing COULD help...yes IF the revenue is use for transit (not even in London is 100% of the revenue used for transit), yes, we can ENCOURAGE development around transit centers. And when these conditions don't quite pan out, the poor are left to lump it.

Neither Freeman nor I assume we have to drive everywhere. There are many ways to make driving more inconvenient than transit, but congestion charging is not one of them. Congestion charging simply turns into a commodity the ability to visit downtown in a car. The studies done on the London system admit that the cost of driving downtown doesn't make up for the time strictly gained. So why are people paying? What are the unquantified benefits they gain even when they have to pay? I'm suggesting those benefits are very real -- in terms of time taken out of one's life, in terms of range of access, etc. And those benefits must be enjoyed equally, not according to the ability to pay.

Diane Livia
Oakland, CA

Develop Bus Rapid Transit With Congestion Funds

I think the areas in the 4 boroughs outside of Manhattan that are underserved by the subway and bus should develop a more extensive bus rapid transit systems with the congestion funds. Perhaps we can use some of the overly large parking lots in some of the new big box developments in these areas as "park and ride" stations.

congestion charging is for the rich

Congestion charging is perhaps the ultimate regressive tax--a limit on where one can travel, a limit on traveling to the most important sector of a city--downtown.

Given the conditions in the U.S., i.e., the long hours we work, the lack of affordable childcare, our income-stratified population, the dependence upon cars demanded and created by the existing infrastructure in all our cities, the small number of homes with 2 parents doing the shopping etc., driving a car is essential to daily existence for most people, and any costs associated with driving create a problematic and disproportionate burden on the poor, the working poor, the working class and even the middle class.

At the same time, driving is a privilege. Why a privilege? Because there are only a small handfull of cities in this country that have anything approaching an adequate public transit infrastructure--and even those do not replace the need for driving. That means that those that own cars, can afford to park them, and if congestion parking becomes instituted, can afford to drive them to the places they need to go, have a tremendous advantage over those who do not. The time saved, the convenience of carrying things, the freedom of movement, the ability to take your children with you -- these benefits of car travel should be shared equally by all -- not disproportionately by the rich.

Yes, we need to vastly reduce fuel emissions. That can be done with electric cars, with efficient fuel, with efficient cars, or with fully functional transit systems that do not have user fees. Eliminating or reducing car travel across the board is not necessary to reduce emissions.

Yes, there are many benefits of creating walkable, bikable communities. But not everyone can walk, not everyone can bike. It's pretty difficult to take your 3 kids to the grocery store and buy 5 bags of groceries on a bicycle--or the bus. The benefits of walkable communities do not obviate the need for cars.

But if we as a society were to decide to make car travel more difficult, more expensive and less attractive, that inconvenience should be shared equally by all, not disproportionately by ability to pay. Beefing up woefully inadequate public transit systems will not even out that inconvenience -- not even in cities like San Francisco and Oakland where there is more public transit than most cities.

Diane Livia
Oakland, CA

Michael Lewyn's picture
Blogger

I don't buy it

The argument that "everyone has to drive so we might as well make it as easy and cheap as possible" is a self-fulfilling prophecy. If government arranges everything for the convenience of the driver, of course you will have cities where walking is dangerous and public transit nonexistent.

you're right, but...

If the transit doesn't lead, kicking people out of their cars, or making it a burden to drive is simply regressive. When the transit is adequate, when the infrastructure supports all of us equally, when it is not an undue burden on folks w/less money to live in the US w/o a car, then we should form our cities to favor walking and biking. Of course, we have to start phasing out the dependence on cars now; we can't wait until the perfect society exists -- but congestion charging is not the place to start.

Diane Livia
Oakland, CA

Congestion pricing and transit improvement, chicken and egg

I have to disagree with Diane, and I speak from the experience of watching the congestion charge go into effect in London, and now I live near the 91 express lanes in Orange County. In London many people argued the same way that Diane does that the transit improvement needs to be in place. However this ignores political reality. There is no funding for the transit improvements we all want, so that is just wishful thinking. What London did right was immediately turn the money around and put it into new and better buses, and into Next Bus electronic signage (on a side note this is the most cost effective transit improvement available. Studies have shown that people weigh waiting time as 3x more onerous than in-vehicle time). Most importantly by reducing the congestion, the buses actually moved faster. So congestion charging actually helped the working class much more than the rich.

Most people also fail to make a distinction between different congestion charging programs. There is zone charging like London, and the proposed New York model, and highway congestion charging like that in effect on the 91 in Orange County, the 15 in San Diego, and proposed for LA. This type of congestion charging is meant to improve highway flow and reduce congestion. In this case too, the evidence is pretty conclusive (I don't have links to the surveys but I have read them) that while the wealthy use the facilities more, the poor and working class also use them. The fact is that no matter how wealthy you are you won't always pay, and no matter how poor you are sometimes you will to get somewhere on time.

Highway congestion charging works for a number of reasons. First it internalizes the cost of driving, and secondly it encourages carpooling economically. If you can carpool then you pay half the charge. From a theoretical point of view, others have pointed out that getting to work on time is probably more valuable to lower wage workers than to salaried workers. Finally many working class people in the service industries will also benefit from variable highway tolling, because the charges will be less during off peak and night times when many split shift, service, and night workers will be using the facilities.

So I don't see congestion charging as charging the poor more for access, I see it as charging everyone for something we all mistakenly take for granted as free.

Here are two stories about getting by in a car-centric metropole

Of course the point of congestion charging is not to get people to NOT drive, its to get people to drive more judiciously (sp?).

http://www.latimes.com/news/opinion/commentary/la-oe-rauzi7apr07,0,37062...

http://www.planetizen.com/node/101

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