Internalizing The Externalities (Of Driving During Rush Hour)
That’s what congestion pricing is all about — making rush-hour car drivers pay for the damage they are doing to the city and its residents.
When cars drive into San Francisco during rush hour, they help to create congestion - traffic jams. Traffic jams are harmful to San Francisco’s economy, and bad for San Francisco’s environment. In economics-speak, these ill effects are termed ‘externalities‘. Rush-hour drivers don’t pay for them - the residents, businesses, and various organizations and institutions of San Francisco pay for them. This has to change.
Back in March, outgoing Supervisor Jake McGoldrick (termed-out) penned a note in the Chronicle which says exactly this:
The repercussions of congestion echo far beyond a few minutes added to a driver’s commute. The honest truth is that congestion is an unforgiving barrier to sustainable growth. The time we spend on our clogged streets takes time away from work, family, our lives - and affects our economy, the air we breathe, the very livability of our city.
There are plenty of benefits to congestion pricing, but when we’re advocating for congestion pricing, I believe it is in our best interests to say exactly what Supervisor Jake McGoldrick said - rush hour drivers are not paying for the damage they are doing to the city and its residents — congestion pricing is a way for them to start paying their fair share.
The economic damage argument is compelling:
There is resistance to a “driving tax,” as some have named it. The brutal numbers show that San Franciscans are paying the price of congestion already - $1.75 billion is the annual cost of time wasted in traffic, away from work. San Franciscans pay an annual $300 million in lost fuel costs. San Francisco annually loses $275 million when we can’t move goods. These expenses are ludicrous only in that they are essentially avoidable.
Scholar Richard Hu said that the San Francisco financial sector has shrunk by 50% since its peak. San Francisco has to compete not only with the cities and towns in the Bay Area, but with cities around the U.S. and the world. I’m sure there are plenty of reasons for all the shrinking industries in San Francisco, but I do wonder how many folks got fed up with traffic in the city and opted to move themselves, and possibly their companies, to the suburbs and less-congested cities.
Cars are punishing San Francisco by congesting our economy and our lungs, and I think we should concentrate on these two major issues in our advocacy efforts, but I wanted to say something about a post on Streetsblog today which pointed out a New Jersey town (Wildwood, for you jersey shore fans) that was going to start charging drivers for some of the damage they do when they cause accidents. It’s a great idea. San Francisco needs to follow suit. AAA says that car accidents are actually more costly than congestion:
Auto accidents cost each American more than $1,000 a year, 2-1/2 times the cost of the traffic jams that frustrate the nation’s drivers, according to a report issued Wednesday.
The motorist advocacy group AAA said accidents cost $164.2 billion each year, which based on the methodology used in the report comes to an annual per person cost of $1,051.
AAA said the study that quantified the cost of traffic accidents was conducted by Cambridge Systematics and considered costs from medical care, emergency and police services, property damage, lost productivity and quality of life.
Clearly, this idea deserves more attention.
Back to the congestion charge - a clarification - the congestion charge works in both directions - if you drive into and leave the city during rush hours, you will pay $3 coming in and an additional $3 going out, for a total of $6 per day. That’s still not a lot.
To deal with transitioning people to mass transit from private cars, and give everyone time to adjust, we should phase the congestion charge in gradually - $1 each way for the first three months. Then $2 for the next three months. Then $3, then hopefully higher. Actually, I like this phased approach - we should offer a 1-year phase-in, but set the price at something higher - $4 or $5.
The congestion charge should be tied to inflation. Let the econo-geeks figure out the formula to make it auto-adjust to the next dollar level — i.e. there will probably be several years between raises, but the raise will move in whole-dollar increments — for example, from $3 to $4, then $4 to $5 — not from $3 to $3.12 or some other wacky number.
We also need a new name for ‘congestion pricing’. If you read this blog, you know I admire (in a sick kind of way) the work of whatever PR firm thought up the names of some of the Bush Administration’s most destructive policies - like the Clear Skies Initiative. We need a name that accurately conveys the very real benefits of congestion pricing. This stuff is important, crucial even. Even if we changed the name from ‘congestion charge’ to ‘decongestion charge’ - that would be a big help - but I think we can do even better.
Leave comment (4)[p.s. The Forums are open for participation.]
December 10th, 2008 at 2:21 am
There are no benefits to congestion charging.
These people you condemn for congesting your city are the residents of the city. These people work, live and play in San Francisco and make their journey’s at times necessary for them.
Charging for congestion is a daft idea which assumes those people on a congested road can, will or want to change their lives to avoid paying a charge. Most of these people already consider time lost through congestion and will re-time or re-route their travel plans to suit. Nobody sits on a congested road for pleasure and everyone will avoid congestion if at all possible.
Your proposal to add another cost through a charge is simply punishing people for making a journey - one which is almost always necessary. Those supporting ideas like this always believe it is the other person who pays or the other person who will not be on the road if a charge comes in, a selfish attitude.
I completely support cycling initiatives, but the argument should not be between drivers and cyclists, it should be about providing the facilities needed for all. Cycle paths, better road junctions and cycling facilities at major destinations should all be supported.
Penalising one group (drivers) for making a transport choice when other groups who are responsible for some of the congestion (cyclists and buses) is wrong.
Congestion charging in London has been an abject failure with many businesses going bust and no decrease in journey times inside the charging zone. Indeed traffic speeds have fallen since its introduction. This is why the new mayor recently held a public consultation on the issue and found it was rejected by a huge majority of business and residents. Half the charging zone will now be scrapped.
Don’t make the same mistakes. Congestion charging is an expensive and damaging policy.
December 10th, 2008 at 3:16 am
@Peter - I’m not sure how we’re talking past each other, here. The congestion charge will bang people who cross certain city boundaries - that is, non-residents will finally have to start paying for the damage they do to our economy and our environment. It’s pretty simple, really. All the other things you mention - I’m not sure what they have to do with anything, honestly. If you are costing the city money, and harming the health of the residents of the city, then you must pay for at least some of the harm you are doing. It’s only fair.
December 10th, 2008 at 4:12 am
Hi Peter,
These ‘non residents’ coming into your city through the charging boundaries are bringing commerce, vitality and employment.
If they are crossing the city and exiting again without stopping, then you have a point, but most people will enter because they work, shop, visit family or socialise. All these activities bring vitality into the city and putting a barrier to this will damage the economy.
The experience from across the globe shows that congestion charging damages economic viability. Why would you want to put a barrier up around your city which says people are not welcome?
You say these visitors are costing you money and they should pay for the harm they do. What exactly is this cost to the economy of the city as a whole and who is paying it today?
If you attribute this cost directly against those people driving into the city, then estimate the value of their activities I think you will find the economic value from these people who visit the city far outweighs any perceived cost to you as a resident.
December 11th, 2008 at 6:54 am
Peter,
Of course people who do business in or with the city contribute to the economy here - I’m talking about the damage that rush-hour drivers do that they don’t pay for. Mass Transit riders do very little if any damage - same for bikers and walkers. But rush-hour car drivers are very different. They have to start paying their fair share.
If there is research that exists proving that decongestion pricing is bad for the economy, I’d love to see it — it would directly contradict the studies I’ve seen, including one by one of our local authorities, SFCTA.