There seems to be a flurry of new interest in congestion pricing, partly under the pressure of tight budgets almost everywhere. But journalists can muddy the waters by describing congestion pricing as either exploitative or punitive.
Last month, I was invited to contribute to a Sydney Morning Herald thinkpiece on the subject. My contribution, the second of four pieces here, emphasises that congestion pricing is not about paying for congestion, it's about paying to avoid congestion. The core point:
Suppose you announce that you'll give away free concert tickets to the first 500 people in a queue. You'll get a queue of 500 people. These people are paying time to save money.
Other people will just buy a ticket and avoid the queue. They're choosing to pay money to save time.
Today, we require all motorists to wait in the queue. When stuck in congestion, we are paying for the road space in time rather than in money.
Shouldn't we have a choice about this? Why are we required to save money, a renewable resource, by spending time, the least renewable resource of all?
Unfortunately, the Sydney Morning Herald framed the whole piece with the question, "Should motorists pay for the congestion they cause?" The implication is that congestion pricing is punitive, that some citizens believe that other citizens should be punished for their behavior. The question seems designed to sow misunderstanding and inflame rage. To their credit, none of the four expert responses — even the one from the auto club opposing the congestion charge — really took this bait.
So there's a problem with the terms congestion charge and congestion price. The terms sound like "paying for congestion," when the truth is the opposite, we're being invited to choose whether to spend money to avoid congestion. A more accurate term would be congestion avoidance price or even better, congestion avoidance option. But those are too many words.
Should we call it a decongestion price?
Real congestion pricing is about giving free and responsible adults a set of options that reflect the real-world geometry of cities. The core geometry problem is this:
- Cities are, by definition, places where lots of people are close together.
- Cities are therefore, by defintion, places with relatively little space per person.
- Your car takes 50-100 times as much space as your body does.
- Therefore, people in cars consume vastly more of the scarce resource, urban space, than the same people without their cars — for example, as pedestrians or public transit riders.
- When people choose whether to drive, they're choosing how much scarce urban space to consume.
- If urban space is to be used like any other scarce resource, its price needs to be deregulated so that it is used efficiently.
Congestion pricing is a form of deregulation. It is the most libertarian concept imaginable.
There's another way to mess this up, and that's the term "congestion tax." Here's the New Zealand Herald:
Aucklanders may be levied to drive through increasingly congested streets in the absence of Government funding of the region's "strategic aspirations".
A paper released by Local Government Minister Rodney Hide before Auckland's first spatial plan due out in 11 days suggests raising revenue by charging motorists to drive around the Super City at peak times.
Hide makes clear that this isn't a congestion price intended to reduce congestion. It's just another tax, intended to raise revenue. So just to be clear: If it's congestion pricing, there are public transit (and bike-ped, and casual carpool) alternatives that enable people to get where they're going. The congestion price cordons on the CBDs of London and Singapore work because there's abundant public transit to those places, so relatively few people absolutely have to drive into them. The San Francisco Bay Bridge tolls have a congestion-pricing value because there's both abundant transit and casual carpool options for avoiding them.
If, on the other hand, you're in a place where there's no reasonable alternative to driving — such as large parts of Auckland — then anything that suppresses driving will suppress travel, and that means it will suppress economic activity. And if you're just taxing economic activity, then this is really no different from sales taxes, Goods and Services Taxes (GST), or income taxes. By taxing economic activity, you're suppressing something that government and society should be encouraging. That's not a libertarian idea; quite the opposite.