Discuss the Pros and Cons of Implementing a Nationwide Road Pricing Scheme
Discuss the pros and cons of implementing a nationwide road pricing scheme
The introduction of a nationwide road pricing scheme has been extensively considered in the UK. Early deliberations in the ‘Smeed Report’ implemented road pricing in 1962 using a colour coding system. With computing and telecommunications changes in recent years there is potential for the road pricing scheme, which was a component of the labour manifesto in 2005 using satellite navigation to track vehicle activity, to be developed and implemented. The concept of introducing a market for roads through road pricing has become a highly discussed topic due to the complexity of the operation and how it could revolutionise the actions of drivers in the future with a target of tackling congestion.
There are different types of road pricing including cordon, distance and area schemes. The scheme proposed by transport secretary Alistair Darling in 2005 was a form of road pricing called distance and area pricing which uses tracking technology in cars to record driving and then charge between 2p and £1.34 per mile depending on the level of congestion and time of day. The reduction of congestion would be beneficial to the environment, ‘This is due to the fact that better traffic flow causes less emissions per kilometre driven. Emissions such as volatile organic compounds (VOC) and carbon monoxide (CO) (both are main components in smog) are 250% higher at congestion than when the traffic flows’. This means that less traffic jams would cause fewer emissions as a secondary benefit.
The economic rationale for congestion is ‘Tragedy of the Commons’ which is a dilemma arising from overconsumption of a common good which is in finite resource, for example roads. The over-utilization of roads occurs from the divergence between marginal social and marginal private costs. This is shown in the graph below, the divergence between the social welfare maximising point of consumption Q* and the amount consumed Q is
The introduction of a nationwide road pricing scheme has been extensively considered in the UK. Early deliberations in the ‘Smeed Report’ implemented road pricing in 1962 using a colour coding system. With computing and telecommunications changes in recent years there is potential for the road pricing scheme, which was a component of the labour manifesto in 2005 using satellite navigation to track vehicle activity, to be developed and implemented. The concept of introducing a market for roads through road pricing has become a highly discussed topic due to the complexity of the operation and how it could revolutionise the actions of drivers in the future with a target of tackling congestion.
There are different types of road pricing including cordon, distance and area schemes. The scheme proposed by transport secretary Alistair Darling in 2005 was a form of road pricing called distance and area pricing which uses tracking technology in cars to record driving and then charge between 2p and £1.34 per mile depending on the level of congestion and time of day. The reduction of congestion would be beneficial to the environment, ‘This is due to the fact that better traffic flow causes less emissions per kilometre driven. Emissions such as volatile organic compounds (VOC) and carbon monoxide (CO) (both are main components in smog) are 250% higher at congestion than when the traffic flows’. This means that less traffic jams would cause fewer emissions as a secondary benefit.
The economic rationale for congestion is ‘Tragedy of the Commons’ which is a dilemma arising from overconsumption of a common good which is in finite resource, for example roads. The over-utilization of roads occurs from the divergence between marginal social and marginal private costs. This is shown in the graph below, the divergence between the social welfare maximising point of consumption Q* and the amount consumed Q is
References: Button, K J (1993). Transport Economics. 2nd ed. London: Edward Elgar Publishing Limited. Estrin, S Laidler, D Dietrich, M (2008) Mallard,G Glaister, S (2008), Transport Economics. New York: Palgrace Macmillan. [ 4 ]. Mallard,G Glaister, S (2008), Transport Economics. New York: Palgrace Macmillan. 163 [ 5 ]