What’s up with road pricing?

Road pricing refers to any direct charge levied to the user of roads, and can take the form of fuel taxes, parking fees, road tolls and/or congestion charges. The latter two — road tolls and congestion charges — are getting a lot of media buzz lately.

Simply put, with road tolls, you pay-as-you-drive, usually on multi-lane highways. Ideally, the money goes to build better rapid transit and, if implemented properly, can improve public transit to the point where it really does get people out of their cars in their daily commute. Better transit, less gridlock, lower emissions. Win-win-win! It’s a neat and tidy way to capture the full costs of our transportation network: both the direct costs of building and maintaining our roads; and, the current indirect externalities that don’t get factored in, like pollution, GHGs and health impacts.

If you choose to drive on a designated toll route like Hwy 407 just north of Toronto, you get a bill each month via a tracking transponder in your vehicle or via a photo record of your license plate. The advent of satellite technology is making “smart transportation pricing” much more efficient and cost-effective. No need for 407-styled lights, cameras and transponders. A small GPS unit in your vehicle will automatically track where you go and the company running the system sends you a bill each month. Some systems use GPS units that electronically debit your account!

Congestion charges work a bit differently. The most famous one is the City of London Congestion Charge Zone (CCZ). Similar to road tolls, the intent is to reduce traffic gridlock while raising funds to invest in public transit. If you enter the London CCZ between 7 am and 6 pm, a camera records your license plate and you are automatically charged the equivalent of about CDN$14. Milan, Italy has a similar system called Ecopass; if you drive into the city centre you pay a fee. But, if you drive an alternative fuel vehicle, you get a free pass.

So, how much can road tolls reduce pollution like greenhouse gases? The San Francisco Bay Area Metropolitan Transportation Commission (MTC) suggests that road pricing policies combined with supporting land use policies could reduce GHGs from transportation by 11-14 per cent. Let’s assume 10 per cent in the GTA; that could translate into about 5 million tonnes of GHGs per year by 2020.

Road pricing: a very effective transportation demand management (TDM) measure that reduces traffic congestion, curbs gasoline consumption, cleans the air and pays for better public transit.

Find out more in the Environmental Commissioner of Ontario’s 2008/09 Annual Greenhouse Gas Progress Report.