Congestion prices, carbon taxes, and the art of the possible

If you ask an economist about transport policy, it’s a certainty that they will mention congestion pricing at some point. It’s easy to see why. Currently, we manage our roads like a Soviet supermarket: access is rationed by queues rather than prices. As a result, we get inefficient outcomes. The theoretical and empirical case for congestion pricing is strong. In places where it has been implemented, such as London and Stockholm, it has increased vehicle speeds, improved accessibility, cut pollution, and improved safety. Not bad. Because congestion pricing works, it tends to become quite popular once people can see the results. Although a majority of Londoners and Stockholmians opposed tolls …
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What’s causing Upper Harbour Dr congestion

Last week the Upper Harbour Local Board passed a resolution (below) to try and get Auckland Transport to rip out recently installed cycle lanes near the intersection of Upper Harbour Dr (UHD) and Albany Highway. It’s a section of road that I am very familiar with as I use it regularly when I ride to work. That the Upper Harbour Local Board: request that Auckland Transport urgently revert to the board with an interim solution regarding the potential to reinstate the second vehicle lane near the intersection between Upper Harbour Drive and Albany Highway, by evaluating options including a shared cycle path and walkway. The cycle lanes along UHD were installed last year and I’ve previously written about how AT removed the …
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TomTom congestion report (repost)

This is a repost from 2013 in the issues with the TomTom congestion report of which the latest version has been released today. TomTom have once again released their meaningless congestion index. TomTom has announced the results of the TomTom Traffic Index 2013, revealing New Zealanders waste up to 93 hours a year stuck in traffic and that Wellingtonian’s experienced the worst traffic delays during peak hours, spending up to an extra 41 minutes in an hour commute. The Index also revealed that traffic congestion on non-highways is worse than main roads. The regional results of the Index covers 9 major cities across Australia & New Zealand, with Sydney listed …
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Building a better city: Policies and perspectives (part 1 of 2)

This is the first half of a two-part series of posts. It summarises a few ideas that have been banging around the back of my head for a while – basically, an attempt to answer the question: “What can economics do for cities?” In this part, I discuss a couple of important concepts: agglomeration economies, which underpin cities’ existence and ongoing success, and the potential role of pricing mechanisms for managing urban ills. What do cities do? Cities mean different things to different people. They are places to work, places to play, places to invest, places to consume, places to conduct politics, places to realise one’s individuality, places to blend …
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Now that’s a traffic jam

Think Auckland has a congestion problem, take a look at these images from China a few days ago on the Beijing-Hong Kong-Macao Expressway. It’s the result of people heading home at the end of a week long national holiday. The bottleneck kind of reminds me of this image from Sydney – and which is equally appropriate for another road based harbour crossing s
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Transport CBA, housing supply, and the spatial equilibrium

In comments to a recent post I wrote reviewing recommendations from the Australian Productivity Commission’s review of public infrastructure investment, reader Brendon Harre raised an important question about transport cost-benefit analysis (CBA). He commented that: “the benefits of providing a grid of urban transport options (without mode bias) in advance of development in order to keep land, commercial and residential property affordable is not measured” This is an important issue that’s worth careful consideration. As a best guess, I think that Brendon’s point isn’t quite true. In a roundabout way, transport CBA does capture benefits associated with enabling development. However, the modelling tools available might over- or under-estimate the magnitude …
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Public transport and congestion in Wellington

Last week, I took a look at some new research from the Netherlands that estimated the benefits of public transport for car travel times based on data from 13 “natural experiments” – public transport strikes. The Dutch researchers found that PT provided significant congestion reduction benefits – around €95 million per annum, equal to 47% of PT fare subsidies. While the data was specific to Rotterdam, I’d expect to find similar results in most other cities with half-decent public transport networks. The whole thing got me wondering: Is there any similar evidence from New Zealand? Fortunately for PT users and drivers, but unfortunately for researchers, potential PT strikes have mostly …
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Congestion Charging in Wellington

Auckland may be the most prominent voice when it comes to discussing congestion charging in New Zealand but it appears other cities are keen to join in. Last week it emerged that Wellington are also wanting to look at congestion charging however unlike Auckland where it is being talked about primarily as another revenue source, Wellington say they need it to deal with the after effects of building new motorways. The call for a toll on Wellington’s CBD is growing louder, with studies revealing the central city could be flooded with almost 12,000 more cars once its proposed new motorways are up and running. Wellington recently joined forces with Auckland to …
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How important is public transport for reducing congestion?

In July, I started taking a look at the economics of public transport fare policies. In the first part of the series, I took a look at how traffic congestion can be a rationale for public transport fare subsidies. (Parts 2 and 3 dealt with different issues.) I observed that: In the absence of congestion pricing (and in the presence of other subsidies for driving, such as minimum parking requirements), higher public transport fares can result in a perverse outcome – additional congestion and delays for existing road drivers. This is shown in the following diagram: Effectively, a failure to price roads efficiently means that we have to provide subsidies …
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