Thoughts on Congestion Pricing and Carbon Pricing

A visit to London got me thinking about congestion pricing here, since it has been widely deemed a success. Here’s some information that I found about the results of congestion pricing:

“Traffic in the congestion-pricing zone has been reduced by more than 20% - resulting in more reliable and safer journeys for businesses, bus passengers, cyclists and pedestrians. It also means, according to many businesses, a more pleasant working environment and benefits for employees using public transportation. The number of bicycle trips within the central zone has grown by 43% since February 2003. Carbon dioxide emissions in the zone have fallen by 16%. Road safety is improving, with 70 fewer serious personal injuries a year in the central zone. The $250 million raised annually through the Congestion Charge has been invested back into public transportation, walking and cycling to further improve traveling within London.”

http://www.nydailynews.com/opinions/2007/10/04/2007-10-04_a_congestion_pricing_plan_can_refuel_thi-2.html?print=1

I think one of the key attributes of its success is the provision of alternative transportation modes. The Tube and the bus system are a credible alternative that provide adequate mobility. They are considering expanding the congestion pricing to the entire town of Cambridge (a satellite city/college town about 50 miles from London) which also has notably bad congestion. While Cambridge has a local bus system and a train stop connecting it to London, the town's public transportation is still a far cry from the London city center.

My cousin in England, with whom I stayed, lives in a small townhouse on the outskirts of Cambridge about 3-4 miles from the center of town. He works at a scientific research campus near Cambridge which is primarily surrounded by countryside and his wife works in London. He drops her off at the commuter train station on his way to work and she has a two hour train ride into the city. With the congestion pricing, they would be looking at paying the congestion fee twice a day for my cousin to pick up his wife. And alternatives don’t look like much fun – she already spends four hours commuting and taking a bus or bike into town would only add another hour or two each day.

Instead of a congestion charge, Berlin is moving forward with limits on driving in its city center based on CO2 emissions. Beginning January 1, 2008, the cars that produce the most pollution will not be allowed within the “Ring,” the S-Bahn line that encircles the central neighborhoods of Berlin. Germany has a system that ranks cars according to pollution levels, with the registration sticker showing which pollution category the car falls within. In 2010, the restrictions will be tightened, and the next most polluting class will be included in the ban.

This provides an incentive to own a car the produces low levels of emissions. But it is also a regressive policy, since many of the people that own the older, pollution producing cars cannot afford something new. While it keeps out the cars that produce the highest pollution, it doesn't limit the amount that all the other cars drive either. To reduce the regressive effect, something similar to a low-income tax credit could be given to people with limited income that invest in a newer car with low emissions. Perhaps this might be a stretch with current political reality, but there are options that could help reduce the regressive effect.

I think a combination of the London and Berlin plans would reduce not only the reason to travel frequently by car but also to own a car the produces a lot of pollution. Not sure if these ideas will fly in the U.S. anytime soon, seeing how New York's congestion pricing has fallen on its face, but we'll see how the European experiments work.