Battery electric vehicles in cities: Measurement of some impacts on traffic and government revenue recovery

We are told that electric vehicles, cars in particular, will be good for the environment. But what exactly might this mean? It is true that end use emissions will be significantly reduced when we move from fossil fuels to green energy sources? Assuming that the demand for such cars, including battery electric vehicles (BEVs) in particular will grow, we can expect a significant number of such vehicles manufactured in future years. Given the potentially relatively lower cost (fewer moving parts) compared to internal combustion engine vehicles as well as the significantly lower usage costs per kilometre, we would expect a level of uptake that could impact on the performance of the road network (perhaps increased congestion and crash risk) but also a concomitant reduced use of public transport and fuel excise loss. In this paper, we apply the MetroScan modelling system in the Greater Sydney Metropolitan Area (GSMA) over the period 2021–2056 to identify the likely impact that the growth in BEV ownership and use will have on vehicle kilometres, modal shares, government revenues, levels of CO₂ emissions and other impacts. Moreover, we investigate the introduction of a BEV usage charge proposed in Australia to see what it might do to these key performance indicators and whether it can offset the adverse effects during BEV uptake such as government fuel excise revenue loss and increased congestion.     

The impacts of congestion on automobile accessibility. What happens in large European cities?

Every day, a significant part of the population in large cities suffers transport congestion. One effect of this is a change in the spatial distribution of accessibility, which may lead to people or businesses finding themselves temporally in areas where accessibility values are lower than either desired or required. This paper studies changes in automobile accessibility over the course of the day, as caused by congestion of the road network in eight metropolitan areas of the European Union: London, Paris, Madrid, Berlin, Barcelona, Rome, Hamburg and Milan. The study was carried out using millions of data points on real speeds on segments of the road networks gathered over the course of two years from TomTom® devices, which provided for the incorporation of a dynamic perspective of accessibility. In each of the areas studied, the different impacts of congestion on automobile accessibility can be observed from differences in the distribution of opportunities and the provision of infrastructures, as well as from differences in culture and customs. Despite these differences, all cities experience two peaks with a lower value during the morning and afternoon. However, results show differences in the intensity and form of the effects of congestion on accessibility in these metropolitan areas. London, Paris and Rome are the cities where congestion has the greatest impact on automobile accessibility, while the Spanish cities are hardly affected by it.     

Tradable credit schemes for managing bottleneck congestion and modal split with heterogeneous users

This paper examines the efficiency of a tradable travel credit scheme for managing bottleneck congestion and modal split in a competitive highway/transit network with continuous heterogeneity in the individuals’ value of time. Each user is initially endowed with a certain amount of travel credits and can sell or buy additional credits in a free trading market. Time-dependent credit charge is implemented only for usage of the road bottleneck. We show that both the modal split and credit charge at equilibrium are unique, and the scheme is always Pareto-improving when the system optimum is achieved.     

Optimizing the benefits of urban road user charging

Traffic congestion is a feature of most modern cities but attempts to control it or limit its effects have met with only modest success. There is significant and continuing interest in the concept of charging city vehicle users, although apart from the use of parking charges actual operational schemes are few and far between. In this paper, we compare three alternative charging policies using a simplified model of travel demand and supply, which we combine with cost benefit techniques. The charging policies are area-based charging in which users pay to locate in or enter an area, terminal-charging based on supplementary parking fees in residential and non-residential locations and distance-based charging which is a charge related to how far users travel. The model allows for behavioural effects resulting from trip diversion and demand suppression, as well as capacity restraint (speed-flow feedback effects based on limited route capacity). In the case study, we parameterize the model using data and geographical dimensions based on London. We show that area based charging delivers the least benefits whilst a hybrid policy based on terminal and distance-based charges delivers the most. Because it is of topical interest, we compare our results and predictions with the Mayor's strategy for London, which is an area-based scheme. We conclude that the revenue generated using a hybrid policy would be as great as for an area based scheme whilst at the same time delivering substantially greater benefits to road users in terms of travel time and other savings.     

Changes in the frequency of shopping trips in response to a congestion charge

This paper presents an analysis of shopping trips into London's central shopping district (Oxford Street area) before and after the introduction of the congestion charging scheme in February 2003. In collaboration with a major department store, three surveys have been conducted in order to understand the changes in shopping frequency and the reasons for so doing. The analysis is based on tabulations of the raw data, binary logit models to analyse which customer groups have reduced their shopping frequency and ordered logit models to analyse which groups have reduced their shopping more than others. The outcome shows that within the sample surveyed the congestion charging scheme has caused a significant number to shop less often in central London and only a few to shop more often in the Oxford Street area. Negative experiences with the congestion charging scheme or a generally bad perception of the scheme are the main reasons for this. Other events, such as the Central Line closure or terrorist threats occurring at the same time also have a temporary influence on the shopping frequency in central London. Evidence from other travel demand measures on city centre shopping activities suggest that the long-term effects of the congestion charge could be more positive.     

How large is the gap between present and efficient transport prices in Europe?

In this paper, we analyse the gap between present transport prices and efficient transport prices. Efficient transport prices are those prices that maximise economic welfare, including external costs (congestion, air pollution, accidents). The methodology is applied to six urban and interregional case studies using one common optimal pricing model. The case studies cover passenger as well as freight transport and cover all modes. We find that prices need to be raised most for peak urban passenger car transport and to a lesser extent for interregional road transport. Optimal pricing results for public transport are more mixed. We show that current external costs on congested roads are a bad guide for optimal taxes and tolls: the optimal toll that takes into account the reaction of demand is often less than one third of the present marginal external cost.     

A socio-economic assessment of proposed road user charging schemes in Copenhagen

Road pricing, congestion charging, toll-systems and other road charging instruments are intensively discussed in many countries. Although many partial analyses of the consequences have been published, few overall socio-economic analyses have been carried out. The article presents such a socio-economic analysis of four different proposed road pricing schemes for the Copenhagen area. The purpose was to assess all benefits and costs involved, including impacts on traffic and environment, maintenance and financing costs as well as tax distortion effects. It was concluded that the socio-economic surplus of the projects depends crucially on the congestion level. With the current traffic level, road pricing will not yet be socially expedient in Copenhagen. However, if the opening year is postponed to 2015, the two most favourable schemes will turn positive. The analyses also showed that the magnitude of demand response by introducing road pricing is likely to have significant impact on the project surplus. This is an important observation because most short-term driven traffic models will then underestimate the projected surplus. Finally, it was found that the degree to which benefits outweigh costs depends considerably on the use of revenue. Although it may contribute to decreasing road congestion, recycling all of the revenue back to the transport sector turned out to be inefficient and costly.     

Congestion and multimodal transport: a survey of cargo transport operators in the Netherlands

Longer and more frequent traffic jams in the Netherlands are increasing the costs of transporting cargo. Tightly scheduled production systems rely on punctual materials movements, but are congestion-induced delays sufficient to stimulate freight mode switching from road to combined road–rail and road–water movements? A survey of Dutch transport companies revealed an estimated 10% of vehicle operating time spent in congested conditions. The perceived impact on transport operations, consumers and service characteristics are reported. Based on the survey findings, a vehicle cost simulation attributed 7% of transport costs to congestion, increasing the attractiveness of multimodal transport and other solutions.     

Reducing road congestion: a reality check

For some little while now, transport policy seems to be focused on massive relative increases in public transport ridership and reduction of car use, resulting in a hoped-for reduction in road congestion. Starting with concerns with vehicle emissions as far back as the mid-1980s, and moving now into more of a focus on greenhouse gases and congestion, current transport policies are aimed at reducing two perceived externalities of increasing car use—vehicular emissions and congestion. This paper seeks to check the reality of these policy directions and question whether these are desirable, let alone achievable end states. The paper starts by looking at congestion and questions whether or not it is intrinsically bad. The negative and positive aspects of congestion are explored. The concepts of accessibility and mobility are discussed, particularly in relation to congestion and capacity increases, with the idea of trying to understand better what capacity increases or increasing congestion do to these two measures. The expectation must be that congestion levels are likely to continue to increase into the future, both as a result of increasing population and also increasing real wealth and changes in preferences. This section of the paper concludes that it is within the power of the market place to offset some of the negatives of congestion.In the next section of the paper, the potentials to increase public transport ridership are examined. An illustration is provided of the likely impacts of achieving a doubling in public transport ridership in a hypothetical city. It is found that the effects of such an achievement would be relatively small on the overall congestion of the road system, and that these effects would also be likely to be fairly short-lived. At the same time, the investments that would be necessary in the public transport system are enormous, and there is relatively little likelihood that one could achieve such an increase in ridership within current development patterns. The paper also addresses the potential of congestion pricing or road user charges to impact congestion. It is concluded that charging motorists a politically acceptable amount will probably still not make significant impact on overall system congestion, while the potential for serious impacts on the economy become large if the charges are made sufficiently high or the area covered is made sufficiently large. In the final section of the paper, a number of policy directions are put forward as suggestions for how to deal with the issue of congestion, capacity, and the declining share of market of public transport. These policy directions are not generally the ones that are being pursued today. The issue of congestion pricing is revisited, and a case is made for a kilometrage charge on road users to replace most current licensing schemes.     

Making urban road pricing acceptable and effective: searching for quality and equity in urban mobility

Urban Road Pricing has been proposed many times as a powerful instrument to fight congestion in urban traffic, but has systematically faced a hostile political envirionment, due to lack of confidence on its promised (traffic) results and fear of its political consequences. Lack of action in this front is contributing to stable or even growing congestion problems in most large cities.This paper tries to address the problem with a fresh look at the objectives of road pricing and at the reasons for that political hostility. For managing and developing the urban mobility system, efficiency and equity are normally taken as the basic economic objectives. Sustainability objectives may be integrated in the efficiency objective if we are able to represent adequately the costs of the resources consumed in the process. Political hostility is normally based on having to pay for what was freely available, and on the risk of exclusion for those with little revenue available for the extra cost of driving into the city.Pursuit of efficency leads to suggestion of marginal social cost pricing but this is hard to explain to the public and application of this principle is fraught with pitfalls since some components of that cost get smaller as traffic grows (noise related costs for example). Pricing is still a good option but the objective has to be something easier to understand and to serve as a target for mobility managers. That “new” objective is quality of the mobility system, with a meaning similar to that of “level of service” in traffic engineering, and prices should be managed to across space, time and transport modes in such a way that provision of service is made with good quality in all components.Pursuit of equity leads to some form of rationing, which has often been associated with high transaction costs and abuse by the administrators. But the use of electronic road pricing should allow easy ways to address the rationing process without such high costs. The basic proposition is that all local taxpayers receive as a direct restitution of their tax contribution a certain amount of “mobility rights”, which can be used both for private car driving in the tolled areas and for riding public transport.These principles are easily applicable with a variety of technical solutions for road pricing, from the simplest cordon pricing to the more sophisticated “pay-as-you-go” schemes. The paper addresses this question of implementation and argues for increasingly sophisticated schemes, as people get accustomed to the principles and finer targeting of demand segments may be needed.     

Achieving genuinely dynamic road user charging: issues with a GNSS-based approach

A variety of approaches to road user charging (RUC) for reducing congestion and raising revenue to maintain and improve transport infrastructure is in place in many countries; examples of such RUC include: an Electronic Fee Collection System in Singapore, Cordon Pricing in Oslo City in Norway, Zoned Based Pricing in London and Distance-Based Pricing (also called Pay-As-You-Drive) in Germany and Switzerland. With the development of satellite technologies, the introduction of dynamic pricing becomes possible, affording an opportunity for RUC to fully reflect the ‘Polluter Pays Principle’. This paper provides critical and comparative assessments of existing road user charging (RUC) systems with reference to technological limitations and public and political acceptability. The paper then goes on to demonstrate a system architecture for a Global Navigation Satellite System (GNSS) based dynamic road user charging system capable of considering dynamic variables. Finally we consider the feasibility of the proposed system in relation to technology readiness and public acceptability. We then consider some potential wider benefits from the introduction of a comprehensive system that could be highlighted to justify the cost of development and implementation as well as to improve public and political acceptability. The paper ends with conclusions and future research directions.     

Estimating marginal external costs of transport in Delhi

This paper develops the model and methodology to estimate the marginal external cost of urban road transport, which is necessary for analysing optimal urban transport prices. Four major marginal external costs analysed in this paper include the marginal external costs for congestion, air pollution, road accidents and noise. The paper estimates the marginal external costs for cars and buses in peak and off-peak periods for Delhi urban agglomeration for the year 2005.     

The cost of relying on the wrong power—road wear and the importance of the fourth power rule (TP446)

This paper investigates the effect on road wear and deformation of alternatives to the Fourth Power Law in a computable general equilibrium model of Sweden. The alternatives considered are the first through fifth powers, and the results indicate that the results are similar in all cases but when the first power is employed. This follows from the fact that designing the charge according to the first power amounts to a weight-distance charge rather than an axle-weight-distance. The paper also investigates the cost of designing a charge according to the wrong power, i.e. not according to the true relationship between road wear and road use. The results indicate that the cost of choosing the wrong power is relatively small, but slightly higher in the case of the first power. Indeed, there are several implicit costs that seem to have to be taken into account when implementing a charge according to the former power, i.e. a weight-distance charge.     

Substituting a tramway to a bus line in Paris: Costs and benefits

In Paris, an old bus line on the Maréchaux Boulevards has been replaced by a modern tramway. Simultaneously, the road-space has been narrowed by about a third. A survey of 1000 users of the tramway shows that the tramway hardly generated any shift from private cars towards public transit mode. However, it did generate important intra-mode transfers: from bus and subway towards tramway, and from Maréchaux boulevards towards the Périphérique (the Paris ring road) for cars. The various benefits and costs of these changes are evaluated. The welfare gains made by public transport users are more than compensated by the time losses of the motorists, and in particular, by the additional cost of road congestion on the Périphérique. The same conclusion applies with regard to CO₂ emissions: the reductions caused by the replacement of buses and the elimination of a few cars trips are less important than the increased pollution caused by the lengthening of the automobile trips and increased congestion on the ring road. Even if one ignores the initial investment of 350 M€, the social impact of the project, as measured by its net present value is negative. This is especially true for suburbanites. The inhabitants (and electors) of Paris pocket the main part of the benefits while supporting a fraction of the costs.     

Delineating traffic congestion zones in cities: An effective approach based on GIS

Identifying congested areas for implementing road pricing is a complicated task, especially as traffic speed and other census data may not be readily available before a detailed feasibility study is commissioned. In this study, we introduce a spatial approach to identify areas with road traffic congestion within cities. The results obtained are validated against the empirical traffic speed data in four Asian cities, i.e. Bangkok, Hong Kong, Kuala Lumpur, Singapore, from 2018 to 2020. Moreover, the findings are also compared with a more detailed conventional method of using job density to identify areas of high traffic congestion. The comparisons show that the spatial approach is both efficient and effective. Through applying the method to London, Milan and Stockholm, the study also demonstrates other potential empirical applications in reviewing the boundaries of existing congestion charging zones.     

The impact of the London congestion charging scheme on the generalised cost of car commuters to the city of London from a value of travel time savings perspective

This paper shows that the impacts of the London Congestion Charging Scheme should not be analysed from the standard approach to value of travel time savings. This will invariably lead to the mistaken conclusion that drivers who value their travel time savings below the £5 congestion charge will be regarded as losers from the Scheme. The use of a simple expression of generalised costs leads to different conclusions. First, a motorist who continues to drive but values the time savings of the Scheme less than £5 can still gain from the scheme, if the generalised cost post-charging is lower than the generalised cost pre-charging. Second, a motorist who switches to the bus can still gain from the scheme. Since the bus travel time post-charging will typically be lower than the bus travel time pre-charging, it is possible that the generalised cost of a trip by car pre-charging will be higher than the generalised cost of a trip by bus post-charging, even after taking into consideration the inconvenience of switching.     

Regional road development,rural and urban poverty: Evidence from China

The study estimates the impact of road investments on overall economic growth, rural and urban growth, and rural and urban poverty reduction. To achieve these goals, an econometric model that captures the different channels through which road investment impacts growth and poverty is developed and estimated using provincial-level data for 1982–1999 in China. Low-grade (mostly rural) roads have benefit/cost ratios for national GDP that are about four times larger than the benefit/cost ratios for high-grade roads. In terms of poverty reduction, low-grade roads raise far more rural and urban poor above the poverty line per yuan invested than do high-grade roads. Another significant finding of the study is the trade-off between growth and poverty reduction when investing in different parts of China. Road investments yield their highest economic returns in the eastern and central regions of China, while their contributions to poverty reduction are greatest in western China (especially the southwest region).     

Basic economic principles of road pricing: From theory to applications

This paper presents, a non-technical introduction to the economic principles relevant for transport pricing design and analysis. We provide the basic rationale behind pricing of externalities, discuss why simple Pigouvian tax rules that equate charges to marginal external costs are not optimal in ‘second-best’ settings, and discuss the conceptual link between congestion pricing and road capacity. The final part of the paper is devoted to implementation paths for transport pricing policies. A simple numerical model demonstrates how different time patterns of constraints on pricing and capacity policy instruments may lead to different time patterns of efficiency along those implementation paths.     

Willingness to spend and road pricing rates

Using a theoretical model of urban transport system the paper examines the influence of distribution of willingness to spend within the urban population on road pricing rates. It shows that the rates that must be imposed in an urban area in order to maintain pollutant concentration and congestion due to traffic within acceptable levels is heavily dependent on the distribution of the urban population’s willingness to spend. This fact severely limits the reliability of any method for calculating road pricing rates based on theoretical analysis, so that an experimental approach seems necessary. The paper shows that a relation exists between the toll rate per kilometer of trip and the average traffic congestion, which is typical of each urban area and can be determined experimentally by successively imposing three different rates and measuring the corresponding congestion levels. The relation can then be used to determine the pricing scheme when the purpose of road pricing is to maintain both the congestion and the environmental effects due to urban traffic below acceptable thresholds. An example shows how the model can help policymakers in decision-making processes.     

Airline cost changes: To what extent are they passed through to the passenger?

Since the start of the Millennium airline costs have been highly volatile, mainly due to large fluctuations in jet fuel prices. An important question for airlines and regulators is whether airlines are able to pass through cost changes to their prices. Little empirical evidence on the pass-through of costs exists. In this paper, we investigate which pass-through rates are most likely. According to economic theory, the pass-through of costs depends strongly on the type of cost increase (firm-specific or sector-wide) and market conditions (monopoly, oligopoly, perfect competition). In monopolistic markets, the shape of the demand curve also matters (linear, constant elasticity, log, power function). A pass-through rate of 100% is often assumed based on the reasoning that the aviation sector is highly competitive. We analyse market concentration in all airline markets in the world, and generally find a high level of concentration. Additionally, different airlines offer different products based on a variety of factors, including service, flight frequency, legroom, bags allowed on board, flight time and transfer time. Therefore, most aviation markets can be characterised as differentiated oligopolies. As airlines choose their quantities first (flight schedules) and adapt their prices to demand (yield management), we consider the Cournot model the best choice. In such markets, firmspecific cost changes will be passed through by a rate of less than half while sector-wide cost changes are passed through by a rate of more than half. In specific situations, the pass-through rate may be different. Examples are limited airport capacity (congestion), cross-subsidization, and the extent to which there is a level playing field.