Policy Wise

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A proposed congestion charge in U.K has led to much resistance among commuters.

A transport ministry proposal last year for a road congestion charge that could see drivers pay up to $2 a mile has sparked an online revolt, with motorists crashing part of the British prime minister’s Web site Monday night in a barrage of protests.

“We’ve seen a succession of governments look at drivers as a source of public revenue,” said Mark McArthur-Christie, a director of the Association of British Drivers, a motorists’ lobbying group. “But I think the government pushed things one too far.[link]

While some sort of congestion charge is already a reality in many of the big cities, charging 2$ a mile is certainly taking things a little too far, especially when gasoline in Britain is already heavily taxed. What the government should concern it self is to find out why people are still resistant to using public transport. The system might require changes which would make it easier for people to give up private transport. Just charging excessive congestion charges without proper public policy interventions makes little sense.

Congestion charges are means to achieving an end, they shouldn’t become an end in themselves.

Update- Here’s a slightly different take on congestion charges.

But the fact is that congestion pricing is conservative economics at its best. For decades, conservatives have championed market-oriented solutions to highway problems as a means to allocate scarce resources. Congestion pricing gives consumers the opportunity to decide when it is in their economic interest to ride crowded roads, and whether the price charged for a given trip is worth their travel time savings.In the former Soviet-bloc states, the standard way to allocate scarce goods was to set the purchase price low enough for everyone to afford, but to make consumers wait in long lines to buy them. The real price depended on what value consumers placed on their time.[link]

But what if the consumers have no alternative to road transport? The key to my mind is coupling congestion pricing with investments in public transport.

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