Transport economics Why is transport important?
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- Global Positioning Satellite technology (GPS)
- Payment systems There are four basic methods by which drivers can be charged, each with a number of variations: Pre-payment
- Eddington’s contribution
- Sustainability and transport
- A sustainable transport policy
- Blueprint 5 suggested the following policies to achieve a sustainable transport policy.
- Current government policy
- Maximise the competitiveness and productivity of the economy
- Address climate change by reducing CO2 and other greenhouse emissions
- Improve quality of life through reducing transport’s negative impacts
CONGESTION CHARGING The need to tackle congestion Why traffic congestion is getting worse Great Britain is a small and densely populated island Our towns and cities were built long before the car was invented and there is no room to provide more roads or parking spaces within them Car ownership continues to grow rapidly: 71% of households have access to a car; ownership of two or more cars rose from one in six households in 1986 to one in four in 1999 The relative cost of owning and driving a car is getting cheaper - and the government forecasts that costs will fall a further 20% over the next 10 years Meanwhile, public transport fares are rising and continue to attract less subsidy than elsewhere in Europe We are using our cars more and driving them further than motorists in the rest of Europe. The UK has seen the fifth highest growth in car modal share - increasing by 6.8 % between 1980 and 1998, compared to the European average of 5.3, even though there has been a lower than average increase in car ownership We now spend an average of 216 hours a year in our cars - in 1976 it was 92 hours We are commuting further to work We are driving our children to school more and ‘school run’ traffic adds a fifth to the total number of cars on the road at peak times We all want to use the busiest roads at the same time of day - and there is no incentive or penalty, other than congestion, to do anything else An RAC Foundation study has shown that just to keep traffic congestion at current levels would require a five-fold increase in what we spend now on road building, or a rise in fuel duty to five times the current level Large road building programmes are unpopular with the public on environmental grounds - there were widespread protests and demonstrations during the last Conservative government’s road building programme As new roads are built traffic levels quickly grow to fill the extra capacity - the M25 is a classic example No growing economy has yet managed to cut congestion Roads are almost the only public utility that is free at the point of use
Options:
‘No parking’ areas to ease the flow of traffic ‘Resident parking only’ zones to discourage traffic in quieter areas Price - Introducing parking meters and paying car parks where drivers are charged by the time in a zone. Prices can be raised to a level that influences travel behaviour Congestion charging - where drivers are charged for entering a charging zone Workplace parking levy - where companies and organisations are charged for each parking space at their premises. Currently, up to 90% of people driving to work park freely when they get there. As a result there is no incentive to consider alternative forms of travel Effective penalties and adequate enforcement to ensure drivers stick to the rules Park-and-ride - where motorists are encouraged to park out of town centres and use cheap or free dedicated bus services - running on bus lanes - to get into the centre Cycle lanes - to give people more confidence to travel by bicycle Extra, secure parking facilities for bicycles and motorcycles Traffic calming - creating zones where road humps, visual obstructions and zigzag routes discourage fast driving and encourage motorists to consider alternative routes Speed restrictions - introducing, for example, lower speed restrictions outside schools and other areas Pedestrianised areas - separating traffic from pedestrians completely, particularly in parts of city centres Gated areas - which allow buses through to the centre of a city but exclude cars Green travel plans - which encourage employers to incentivise staff to come to work by other forms of transport. This might mean extra money for people who car share, negotiating bulk discounts with transport operators for season tickets, or providing special facilities like showers and secure bike parking for cyclists. The incentive for companies is that it can reduce their need for parking spaces which can reduce their costs and the space which then be put to better use Microwave technology The illustration below shows how microwave technology operates. Cameras fitted on gantries read number plates as vehicles pass by. (The need for a smartcard to automatically deduct payment is optional.) Automatic number plate recognition (ANPR) technology detects non-tagged vehicles. Of the two electronic methods, microwave technology is by far the simplest. Its main disadvantage is that it requires gantries on every road at regular intervals, something that would soon become unmanageable on any large geographic scale or complex urban area. The use of lampposts has been ruled out as camera angles would not allow detection of every vehicle. 
Global Positioning Satellite technology (GPS) The illustration below shows how the technology operates. Unlike microwave technology, GPS requires no overhead gantries and the necessary satellites are already in orbit. However, there is still a need for fixed or portable enforcement cameras, although these do not need to be as regularly spaced. Even though this technology is far more complicated than using microwaves, it is the only realistic option for any large scale implementation of electronic charging. Again, the use of a smartcard to automatically deduct payment is optional 
The unit in the vehicle works like a car radio - it ‘listens’ for to broadcasts from GPS satellites but does not send any signal back to them. Communication is one-way and private. The in-car receiver matches its position with an electronic map of charged areas and a list of charge rates. The appropriate data is then ‘radioed’ to a processing office for the user’s bill to be produced. GPS is already used for navigation in the road haulage, shipping and aircraft industries and, increasingly with in-car navigation systems. “Assisted GPS” will feature in coming generations of mobile phones. It will incorporate new levels of accuracy in locating the phone’s exact position and will allow retailers, for example, to call potential customers as they pass their doors. In the USA it is expected that all new mobile phones will have this facility by 2005. Payment systems There are four basic methods by which drivers can be charged, each with a number of variations: Pre-payment Drivers pay in advance for a permit to enter or drive in the charging zone for a specified period. Payment on entry/exit Drivers pay on entry or exit to the charged zone, or for using a specific section of road or infrastructure, such as a bridge or tunnel. Pay as you go In principle this operates in much the same way as mobile phone technology. Each vehicle carries a unique tag and is fitted with an onboard charging unit with a smartcard to enable charges to be deducted during the times they apply. Drivers need to recharge their smartcards or purchase a new card once the credits have been used Regular invoicing Similar to ‘pay as you go’ (above) except that instead of paying through an on board unit with smartcard, drivers receive regular invoices through the post (weekly, monthly, quarterly, etc) in the same way as users of a contract-based mobile phone ‘Pay as you go’ and ‘regular invoicing’ are most likely to be used with any widespread charging system and are familiar to people who use mobile phones. These payment methods are able to overcome concerns over civil liberties associated with GPS and so-called ‘spy in the sky’ systems. Eddington’s contribution In January 2007 Sir Rod Eddington produced a report on Transport policy. The introduction to this report is given on the next two pages. We can summarise Eddington as: Congestion will continue to get worse unless something is done to reduce it. There will be severe environmental and economic costs of failing to act. The way forward is a national road pricing scheme and sustained investment in the existing transport network. Investment in transport should be concentrated on the existing network and especially the ‘small’ projects such as bypasses and relieving bottlenecks rather than on grand schemes. (The BCR are significantly higher for these.) Getting the economics right is important, that means: 1. Road pricing 2. Higher fares for peak-time trains 3. Higher taxes on air passenger travel Eddington justified his views on the basis of benefits for business, not reducing negative externalities. Thus special attention should be paid to 1. The international ‘gateways’ for UK trade – airports and ports. 2. Heavily congested urban areas 3. Main inter-urban corridors. However he concludes that most of the transport system works well – which was a bit of a surprise all things considered.
The aims of the government were expressed as: A strong economy. A sustainable environment. An inclusive society. The paper recognised that good communications are ‘central to the improved and lasting quality of life’ and that they were committed to facilitating the mobility of the British people in ‘an economically and environmentally sustainable framework’. The projected rise in road use and the decisions made on new road projects show that to simply allow the situation to develop unchecked would be neither economically viable or sustainable. Integration What is an ‘integrated’ transport policy? A policy which simply addresses to needs of motor car and lorry users could not be considered integrated. An integrated policy looks at all modes and means of transport and ‘concerns the ways or processes by which the individual parts of transport policy are deliberately linked into a policy covering all modes, for both passengers and freight.’. It is possible to improve the overall situation by this wide approach and attempting to move passengers and freight from one mode to another. The 1997 discussion paper pointed out that many people have no real choice in transport modes, for example there is no local bus service to the shops. Further many people will not walk or cycle because it is too dangerous (traffic) or unpleasant (pollution) to do so due to excessive vehicle use. The complaints made about much public transport is that it is unco-ordinated. Timetables mean difficult transfers between services, for example waiting for hours for a connection. Bus and train services operate independently and the train stations are frequently far from bus stations. Public transport is also expensive for the marginal user and when combined with the inconvenience (or great convenience of the car) all this combines to discourage the use of public transport. A frequently cited example is the difficulty of using a bike to get to a train or bus station. What do you do with the bike when you get there? In Europe there is excellent provision for safe storage or transport of the bike. In the UK you are lucky to see the bike again. This means driving to the station is our best option and if you have driven that far why not the rest of the way?27 The fragmentation of the public transport system between providers is an issue here. Bus and train companies are (usually) different and a single journey might involve three or four different providers. The government is concerned to allow users access to information and so have implemented national information services. Through ticketing is also something that would be desirable, i.e. buying a ticket on the bus that gets you to your final destination, three buses and a train ride away. The Dutch public transport system certainly provides for this, but trams, buses and local trains are operated by the same organisation. Thus an integrated policy aims to use all modes efficiently. In the view of economists this means a more efficient use of resources and implies greater use of public transport to avoid wasteful duplication of journeys and to reduce negative externalities that cause allocative inefficiency. Sustainability Difficulties always arise over what is meant by sustainability. For our purposes we shall use the most widely publicised definition due to the World Commission on Environment and Development. ‘Development that meets the needs of the present without compromising the ability of future generations to meet their own needs.’ Thus not only must society concern itself with issues of equity in the present, but of equity over time - so called intergenerational equity. A sustainable transport policy It is clear that transport contributes greatly to the emission of harmful gases and substances (see next section). Further the demand for transport continues to grow, at the very least as fast as GDP, while supply lags behind leading to worsening congestion. A sustainable transport policy must, therefore, be based on three principles: To reduce the rate of growth of future demand for transport. To reduce the future demand for road transport. To promote the increased use of more sustainable modes of transport such as rail, bus, cycling and walking.
Encourage more people to use other forms of public transport. Promote cycling and walking. Increase car occupancy. The future policy will reflect the need to make a difference in the medium and long term. There is little that can be done in the short term. The report of the Royal Commission on Environmental Pollution issued in September 1997 gave a clue to likely future measures. (See page 106 of Bamford for details.) There has been some dilution of these recommendations in recent times as we shall see later. Pearce again According to Pearce having a sustainable road transport system means, “making each road user pay at least the full marginal cost of his or her journey.” He and his co-authors in Blueprint 5 argue that there is no need for an abrupt change in lifestyles to achieve such a policy, merely the correct choice of policy instruments. For them the correct policy is one that focuses on emissions not road use itself. In doing this, rather than focusing on motoring itself, an incentive is given to avoid the financial consequences of the tax by a range of responses including reducing the pollution per mile driven, reducing total mileage, switching to other forms of transport and encouraging the development of low-cost pollution control devices. This is a ‘dynamic’ rather than static solution to the problem. The main problem with this is the inability to monitor many emissions at present. Currently the main two taxes imposed on road transport (fuel excise duty and Vehicle Excise Duty) fail to address the problems of noise, accidents, urban air pollution and congestion costs. Blueprint 5 suggested the following policies to achieve a sustainable transport policy. A uniform tax on carbon emissions throughout the economy. Fuel taxes should be based on the environmental damage each causes. (To encourage the use of cleaner fuels.) More research into valuing the effects of various fuels, including their long-term impact so that appropriate tax levels can be determined. Purchase and ownership taxes to reflect the emission characteristics of the vehicles. (i.e. large dirty vehicles pay more than small clean ones.) Road side spot checks to catch high polluting vehicles. (The MOT test is foreseeable.) Displays of current pollution levels to allow people to see current air quality. This assists those with breathing difficulties and raises public awareness of the problem. In the long term it would make remedial action politically more acceptable. Similar measures to reduce noise pollution as to reduce air pollution. Loss of open access to urban central road network. Area licences or ERP to be introduced. Charges for road damage and accidents to be related to distance. A kilometer tax based on the tachograph in HGV’s, for example. for cars odometer readings or ERP can be used. Speed restrictions to be lowered to reduce accidents and congestion. (Slower speeds reduce accidents and, as the M25 variable speed limits show, can reduce “phantom” traffic jams.) There is a trade off between time saving and accidents/fuel consumption on non-congested roads. We can add to this list policies to encourage a more efficient movement of freight. This would include: Transferring freight from road to rail and water. Reducing the number of lorries running empty or below capacity (raising load factors). Better tracking of vehicles to allow their more efficient use (e.g. directing an empty lorry to a nearby waiting load rather than having it return to base). this can be further enhanced by co-operation between carriers or their customers to share vehicles. There is great public concern about transport, but little consensus. Pressure groups on oth sides push their case with the ‘road lobby’ commanding most votes. Alternative policy suggestions see Commission for Integrated Transport and Transport 200028 for examples. Current government policy There are four policy issues for government. T How best to forecast future transport demand T How best to organize the UK’s transport system T How best to deal with congestion and other negative externalities T How much to allocate from the government budget to transport At national level the government have tried to develop a transport policy that addresses all the concerns we have looked at in the course. Integration and sustainability are clearly important as they cut back the road building programme and encouraged the transfer of freight from road to rail. The numerous policy papers do attempt to look at integrated transport as they look at all modes of passenger and freight transport. However the overall process of resource allocation lacks the cohesion and completeness that a true integrated policy would have. This is due to the fact that: No direct charge is made for most road use. Ownership is fragmented across and within transport modes and industries. An integrated policy requires all decision makers to follow the policy. This seems something very difficult to achieve in UK transport. Eddington has provided a framework for future policy. This has been embraced by government. In October 2007 the government published ‘Towards a sustainable Transport System – Supporting Economic Growth in a Low Carbon World’. The title says it all! Eddington was clear that economic growth was important and he highlighted the need to accept Stern’s view that global warming can be reduced without too much impact on GDP. The government is planning to act on this advice. Strategy Please be clear that the requirement is for an overall strategy. Many commentators in the semi-technical press have totally failed to grasp that a sustainable policy does not mean reducing carbon emissions in every sector. When plans to discuss the further expansion of Heathrow were announced in 2008 the press attacked the government. The government ministers tried to explain that carbon trading meant that if people wanted to spend their carbon emissions on air travel that was fine, the reduction in carbon emissions would come elsewhere as the ETS is a ‘cap and trade’ scheme. The ministers wasted their breath (which is a shame because they actually got this one spot on) but hopefully this idea of overall strategy will not be lost on you. The government therefore aims to promote economic growth and reduce CO2 emmissions. There are five broad goals in the paper. Maximise the competitiveness and productivity of the economy. Congestion raises firms costs and so reduces competitiveness. The challenge is to improve the existing transport network, making journey times more predictable. Policies: Better traffic management, getting ‘prices right’ and some infrastructure development.
Putting a price on carbon is essential, internalizing the externalities. Policies: Indirect taxation, trading mechanisms, provide greener alternatives (public transport etc).
Not much to say on this one – maybe they think its self-explanatory Improve quality of life through reducing transport’s negative impacts Policies: Standard internalizing externalities, providing green alternatives. Promote greater equality of opportunity, in particular through the provision of effective access. Policies: Old persons free use of public transport. Improved services to rural/deprived areas. Resources are to be concentrated on the most congested parts of the transport system, with additional emphasis on public transport. Eddington’s advice that smaller local schemes provide better returns is supported in the strategy. Thus measures to improve traffic flow, park-and-rides etc will receive more funding. Urban congestion will get more attention, but there will be no road pricing scheme until a fuller evaluation (political talk for ‘not before the next election’?). On freight the policy of continuing to encourage more use of rail is the main policy. So far the move to rail has been driven by competition post-privatisation. Containerisation certainly makes rail use easier for firms. The increase in maximum lorry size from 41 to 44 tonnes (on 6 axles) in 2002 was designed to allow more efficient carrying of road freight. Larger vehicles with high load factors means fewer vehicle movements and lower CO2 emissions. There will be consideration of allowing even larger lorries (83 feet long and up to 60 tonnes). These will not be popular with those who live near the roads that will be used. Another measure is to tax the more polluting freight vehicles more heavily. A similar scheme applies to road tax. Reducing ‘food miles’ has also become a popular policy measure. Various examples exist of food travelling thousands of miles (such as chicken from Thailand). In addition we have become used to out of season fruit and vegitables. This is a very modern trend and will almost certainly be reversed in the next decade – so no strawberries in December! Certainly bottled water from outside the UK should become a thing of the past. 2 Ref: Cole. Ch 1 3 Ref: Cole Ch. 2 4 Ref: DETR national road traffic forecasts 1997 on DETR web site. Cole Chapter 8. 5 Sloman 6.1 and 6.2 6 Sloman 7.1 7 Sloman 6.3, 8 Sloman 7.2, 9 Sloman 6.4 10 Sloman p304-5 11 Ref: Bamford Ch. 3 12 The Road from Inequity, Mumford sections 1 and 2 13 Bamford Ch. 4 14 DETR New Appraisal Scheme - Photocopies in classroom resources. 15 For up to date news stories and links to resources on PFI visit www.legalday.co.uk/current/pfi.htm 16 ‘A New Deal for Transport’ White paper 2000 17 The Rural Thoroughbred - summary report, Transport 2000/CPRE 18 Useful websites Rail Regulator www.rail-reg.gov.uk 19 “The Future of Rail” DoT July 2004 20 See Mumford again 21 This is a joke. It is much funnier when there is a Welshman in the class. (You must trust me on this.) 22 The true costs of road transport, Blueprint 5. Copies in classroom. 23 There is a great deal of material on the LTA website. www.lta.gov.sg 24 See Congestion Charging, Update on scheme impacts and operations. Feb 2004 TfL. 25 See ‘Mayor of London, proposals for congestion charging’ is document boxes and Clift’s article from November 2003 Economic Review. 26 See IPPR website www.ippr.org 27 See ‘Destination Passenger: Towards a door to door Railway. Transport 2000 28 CiT www.cfit.gov.uk, Transport 2000 ‘Alternatives to Traffic Growth, Gleeve and www.transport2000.org.uk Directory: files -> quia -> users users -> L y aura un quiz sur le vocabulaire users -> 007. Explain and demonstrate basic cad commands and techniques users -> Vocabulary review users -> Three Approaches to Defining Jazz Mark Gridley, Robert Maxham and Robert Hoff Copyright 1989 by Oxford University Press users -> Inventions and Inventors Web Quest Introduction users -> How do we handle these contacts? users -> A brief History of the Personal Computer users -> Lecture #13 the civil war from The Election of Lincoln to the Surrender at Appomattox Election of 1860 users -> Hours: 05 Term: Winter/Spring 2005 Days users -> Ch. 1 Thinking Geographically Download 4.92 Mb. Share with your friends:
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