Is congestion pricing fair?

Is congestion pricing fair? by Lewis Lehe

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6 Responses to Is congestion pricing fair?

  1. Matt Steele
    Matt Steele May 23, 2014 at 8:53 am #

    As David and many of my former economics professors have said, there are two ways to distribute access to something like infrastructure: by price or by queue. Right now, we (mostly) ration by queue.

    In the past, we made sure the “cups runneth over” with unlimited access to “free” infrastructure. We can’t do that anymore – we ration by queue but the queues are growing as demand grows.

    So at this point we have two options, assuming we can no longer afford to subsidize infinite infrastructure:
    1. We can let infrastructure like freeways reach a saturation point where demand does not grow because traffic doesn’t move. And we can make sure revenues from things like the gas tax pay for the expenses of this infrastructure.
    2. We can properly price a level of service for infrastructure. So the price is set to maintain a constant speed, say 55 MPH.

    Either one of these options would produce less perverse incentives for sprawl than our current unsustainable transportation funding regime. But I think the second option, while being less “fair” on the surface, can be implemented in a fairer way. Imagine if tolls and user fees, above and beyond the cost of maintenance of the infrastructure, was fully dedicated to projects that enhanced mobility and job access to populations that needed it most. The pricing option also makes it so drivers understand the direct cost of their mobility choices in dollars, and so can employers who choose where people will be commuting to. Win!

  2. Ed Kohler May 23, 2014 at 9:11 am #

    I think the fairness argument falls apart when one considers that the people in the non-priced lanes (and people who don’t drive at all) are subsidizing the people who’re paying something – but not nearly enough – for a faster commute.

    The Pros side in the second half of the video seems to assume that congestion priced roads actually run a surplus, when they don’t even cover their own costs.

    • Matt Steele
      Matt Steele May 23, 2014 at 9:13 am #

      But that’s why we should toll all urban freeway lanes, and toll enough to cover their full costs!

      • Ed Kohler May 23, 2014 at 10:26 am #

        @Matt, are there examples of roads tolled at rates that cover their true costs?

        • Matt Steele
          Matt Steele May 23, 2014 at 10:40 am #

          Probably not. If road users were actually required to pay for their mobility choices, either through tolls or the gas tax, we probably wouldn’t have so many roads.

          • David Levinson
            David Levinson May 23, 2014 at 5:17 pm #

            There are profitable toll roads (Delaware and NJ Turnpikes come to mind in the US, internationally this is quite common) that more than cover operating and capital costs, and would cover reasonable estimates of the economic costs of environmental externalities. One could always decide environmental costs are higher such that nothing passes the test.

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