Society needs traffic and traffic usually represents a good thing as long as vehicles are moving. We need traffic to deliver goods and services, to travel to and from work and to leisure activities. On the other hand, when traffic isn’t moving, a range of negative impacts occur. Congestion normally takes place in the morning and afternoon peak and creates problems such as emissions and noise, which creates health problems, and delays for all motorists. This represents enormous costs to society every year. In Europe, annual congestion cost is estimated to around 1.1% of EU GDP. Congestion also creates a pressure to build more roads that will remain un-used large parts of the day and which will also lead to more traffic in the peak. Although many motorists complain about the price of petrol, our congested cities is a clear indication that transport isn’t expensive – it is cheap! It is so cheap that motorists daily demand more road space than what is available.
Economists realised that this would occur even as early as when the car was a luxury item only available to the few. The solution, as advocated by Cambridge economist Arthur Pigou in the 1920s and later by a range of respected academics, was to use specific taxes to correct for negative externalities such as congestion. Today, we have come to know this as congestion charging and it is now more relevant and discussed than ever. And it was congestion charging that was the topic of the day at a recent seminar on the challenges of megacities in Indonesia, a seminar which also included a speaker from the Norwegian Public Roads Administration.
Traffic flowing smothly through an automated toll booth in Oslo
Congestion charging is widely regarded as the most efficient measure if our objectives are to reduce traffic, congestion and emissions and to increase the public transport share. Other policy instruments, such as road construction, low emission vehicles, improved public transport or traditional toll financing could meet some of these objectives, but congestion charging is the only measure that meets all of these objectives and which will also provide the city with a steady stream of revenues. Cities such as Singapore, London and Stockholm have realised this while the discussion goes on in other countries whether to introduce such a measure or, as in Norway, to convert existing charging systems into more demand management oriented systems.
One would have to look hard to spot any similarities between Norwegian cities and Jakarta, but Norwegian cities have something that Jakarta lacks and that is urban charging systems, or, more precisely, toll cordons surrounding the cities. The cordons around the major Norwegian cities were introduced from as early as 1986 and still represent rare examples of urban road user charging. Although not yet used for demand management purposes, the revenues from the cordons have been used to finance much needed infrastructure for both private and public transport and plans for future use of the revenues in the Oslo toll cordon also include subsidising public transport operations. We consider the cordons to be a great success and the interest that they attract from other cities throughout the world suggests that the Norwegian approach to solving transport challenges in urban areas could be applied elsewhere too.
A key success criterion to urban road user charging is modern technology. Electronic toll collection represents cost efficient and user friendly solutions and has been in use in Norway since 1987 and today the national AutoPASS system allows users to use the same on board unit in all toll stations in Norway, Sweden and Denmark. This has not been possible without the expertise and commitment of people within our own organisation and the competitive ability of innovative companies in Norway. Modern technology will also allow us to vary charges according to variables such as emission, noise and time and place the vehicle is used.
Neither congestion charging to regulate demand nor traditional toll cordons to finance infrastructure will never be popular among motorists. But they are necessary! Cities, be they in Norway or in Indonesia, can not solve traffic problems by simply building more roads. Uncontrolled demand for road space will strangle our cities and stop economic growth. Supply of road space can not be increased to match demand, therefore demand have to be reduced to match supply. It is certainly politically complicated, congestion charging is hardly a vote-winner, but I think that in fifty years time our grandchildren will wonder what took us so long.