Here's why congestion charging could be the answer to traffic woes

Dr Eric Crampton
The Dominion Post
10 February, 2020

Last week, Transport Minister Phil Twyford shot down Wellington Council's request to levy a congestion charge.

Congestion charging would help ease traffic, and not just in Wellington. But each city coming up with its own congestion charging scheme might not be the best way forward.

Wellington's congestion problems might look a bit provincial to those stuck in Auckland traffic, but no one enjoys rush-hour commutes. On the weekends in the capital, it is hard to tell whether a trip across to Miramar and the airport will take ten minutes or 40.

Done properly, a congestion charge can solve a lot of these problems. It would encourage people to shift their times of travel, or to take the train, if those options worked for them. And, done properly, it wouldn't be a tax grab either. But it could be pretty difficult for one council do it on its own.

How could it work, if central government implemented it properly?

The same kind of technology that lets commercial trucks handle road user charges painlessly could be installed on petrol vehicles. Petrol excise would go away, with road user charges taking their place to collect the same amount of money for the land transport fund.

Carbon charges on petrol would, of course, remain.

The purpose of a congestion charge would not be to fund new roads, or road expansions, or public transport, or anything else. The purpose of a congestion charge would be to get rid of the hassle and time and frustration cost that each of us bears when stuck in traffic, and to replace it with a monetary charge instead that would allow traffic to flow freely.

If you'd like an analogy, think about the old Soviet Union. Prices were officially very low in the government's stores, but everyone had to sit in queues for hours if they wanted to be able to buy toilet paper. That's how we run our roads: the government's set price for getting onto the road is zero, but you have to queue.

Ideally, congestion charging would be revenue-neutral. Road user charges would fund the roads, but congestion charges' only job is to alleviate congestion. The government could take every dollar collected in congestion charges, net of the cost of running the system, and give every person in the country an equal payment out of the collected funds.

Letting prices work can solve a lot of problems. It can also then make additional investments in roads rather less necessary. Traffic engineers like building roads to handle times of peak use. Charges that spread that traffic load more evenly over the day mean that you don't need to invest as much in increasing capacity in the first place.

Even better, the collected congestion charges can start to tell you when it does make sense to increase capacity – to twin Wellington's Mt Vic tunnel, for example, or to turn some of the chokepoint traffic circles on Johns Road in Christchurch into offramps and flyovers. If collected congestion charges around the chokepoint signal that people really put a lot of value on getting across town, that starts making the case for increasing capacity.

If instead we see that the congestion charge needed to for traffic to flow freely around the chokepoint at peak hours is rather low, then the economics of fixes like a second tunnel are likely rather poor.

It's hard to tell which is true until we start pricing congestion.

But all of this would be very difficult for any council to implement on its own. The system requires some technology in cars. If one council goes it alone, you need a system to get out-of-towners to pay. If different councils start implementing it and don't use a common standard for collecting commuting data and sorting out payment, it would be easy to wind up with a mess.

And that kind of mess is what we could too easily wind up with if central government continues to stall on implementing congestion charging. Labour and National both support congestion charging, but neither seems keen on implementing it. Jam tomorrow always seems to be the rule, with congestion charging always just another consultancy report away.

What needs to happen instead is bipartisan agreement to roll-out a national congestion-charging scheme in 2024 – just after the next election. International experience, documented in the Initiative's recent report on congestion charging, shows that voters support well-designed schemes once they become used to them. Setting the roll-out for the first year of an electoral term would help take election worries out of the mix.

Fixing the date would give the bureaucracy a target to work toward. It would also give local governments frustrated by continued delays some certainty. They would not have to try going it alone.

It isn't just Wellington that could use a congestion charge. Central government needs to help get us there.

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