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Congestion Pricing: Still Good For Basically Everyone

3:34 PM EDT on October 13, 2009

Urbanists often find themselves falling into a pattern of thinking that boils down to the dictum that what's good for drivers must be bad for walkability, and sustainability, and all the things that they prize about well-designed cities. Drivers seem to believe this too, which is interesting because it often isn't true.

28.jpgWhat's good for the driver in the middle is also good for public health. (Photo: FHWA)

Take performance parking. Both urbanists (and drivers) seem to believe that it's good (or bad), because it makes parking more expensive, which is bad (or good) for drivers. But this assumes that a free parking system, where open spots are almost never available, is desirable for drivers.

That's like saying that a store that gives away bread for free -- and which subsequently never has any bread -- is good for people who like eating bread.

For the most part, thinking about congestion pricing follows this same rule. Urbanists tend to like it because it makes driving more costly and raises revenue for transit infrastructure. Drivers tend to oppose it, because they don't want to pay more to drive. In fact, congestion pricing would be good for people who really want to drive and good for people who'd like to have an alternative to driving.

This message has been slow to sink in, but the fact that drivers may benefit from congestion pricing may be beginning to resonate with urbanists. Unfortunately -- and so powerful is the what's-bad-for-drivers-is-good-for-cities mentality -- the absorption of this message has caused some urbanists to conclude that they've been wrong all along, and that congestion pricing really is bad. If drivers might benefit, it must be the case that cities, and the earth, will not.

So writes the New Yorker's David Owen, in an extremely misguided piece in the Wall Street Journal.

By requiring car drivers to pay a fee to drive in a cityat peak hours, congestion pricing reduces traffic and raises money thatcan be used to support public transit—both worthy goals.

Yet congestion pricing has dubious environmental value. Trafficjams, if they’re managed well, can actually be good for theenvironment. They maintain a level of frustration that turns driversinto subway riders or pedestrians.

He is saying that congestion pricing is a bad idea, because traffic encourages
drivers to switch to transit or otherwise get off the roads. But this
misses the point that congestion pricing works by ... encouraging drivers
to switch to transit or otherwise get off the roads. And as a bonus, it
creates revenue which can be used to build more transit alternatives
for frustrated drivers.

Owen seems to be arguing that the primary effect of congestion
pricing may be to spread driving out over a longer period of time
rather rather than to encourage a shift away from driving. But of
course, the primary effect of congestion might also be to spread driving out
over a longer period of time rather than to encourage a shift away from
driving, particularly in places that don’t have good transit systems
(which makes the revenue question all the more salient).

The argument doesn't make sense, and it doesn't appear to be supported by actual experience with congestion pricing schemes, as Charles Komanoff points out here. In London, better driving conditions after the adoption of a congestion pricing regime encouraged some drivers to take additional trips, but that increase didn't come close to offsetting the drop in vehicle trips induced by the cordon charge.

As difficult as it may be for all involved to accept, congestion pricing manages to benefit transit riders and drivers. Commutes are faster and emissions are reduced. But the benefits don't stop there.

A new economics paper by Janet Currie and Reed Walker explores what happened to neighborhoods near congested highway toll plazas after those plazas were replaced by the E-ZPass electronic tolling system. Here's the abstract (paragraph breaks mine):

This paper provides evidence of the significant negative healthexternalities of traffic congestion. We exploit the introduction ofelectronic toll collection, or E-ZPass, which greatly reduced trafficcongestion and emissions from motor vehicles in the vicinity of highwaytoll plazas.

Specifically, we compare infants born to mothers livingnear toll plazas to infants born to mothers living near busy roadwaysbut away from toll plazas with the idea that mothers living away fromtoll plazas did not experience significant reductions in local trafficcongestion. We also examine differences in the health of infants bornto the same mother, but who differ in terms of whether or not they were“exposed” to E-ZPass.

We find that reductions in traffic congestiongenerated by E-ZPass reduced the incidence of prematurity and low birthweight among mothers within 2km of a toll plaza by 10.8% and 11.8%respectively. Estimates from mother fixed effects models are verysimilar. There were no immediate changes in the characteristics ofmothers or in housing prices in the vicinity of toll plazas that couldexplain these changes, and the results are robust to many changes inspecification.

The results suggest that traffic congestion is asignificant contributor to poor health in affected infants. Estimatesof the costs of traffic congestion should account for these importanthealth externalities.

That last line is key. We're used to seeing estimates of the costs of congestion, which tend to peg those costs in the tens of billions of dollars annually in the United States. Those estimates primarily estimate cost in terms of wasted time and wasted fuel. Some may attempt to estimate the cost of additional greenhouse gas emissions. Few take into account the direct health effects of congestion.

It's interesting to think about this research in light of the equity arguments made against congestion pricing. Set aside the fact that drivers tend to be richer than transit riders, and that congestion pricing would generate revenue for progressive transit improvements. Neighborhoods located in the shadows of congested highways are unlikely to be filled with wealthy families.

We want our cities to work better, and congestion pricing is one of the very best policy tools available to help that happen. It can make cities more efficient, more equitable, and greener, and it can lead to improved mobility for transit-riders, pedestrians, cyclists, and drivers.

As tempting as it may be for those who love cities to conclude that whichever policies irk drivers the most are the ones we should adopt, far more progress will be made if we recognize that some of the most promising policy changes can be good for nearly everyone.

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