Congestion Charging

Harry Clarke has an interesting piece on the need for congestion charging, how it might be done equitably and the importance of paying for curbside parking in this. I have an excerpt below but I suggest people read the whole thing for themselves.

For pricing to be politically feasible governments must demonstrate that tolls are not a tax grab. Governments must show that all groups are advantaged with efficient pricing. Economists know that with appropriate compensations they can be but this needs to be spelt out to those affected. Tolling charges can be explicitly linked to tax savings elsewhere or to ear-marked infrastructure improvements, such as improved public transport, that benefit transport consumers.

The net benefit of a revenue-neutral switch to congestion pricing roads in the cities stems from the ‘double dividend’ green tax advantages of such charges. Congestion charges yield a revenue dividend but target a social ‘bad’ congestion rather than other taxes which target work effort or savings.

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2 Responses to Congestion Charging

  1. Rod says:

    Its just another tax Steve. And I dont trust governments who have spent the last 15 years dreaming up new ways to tax people to suddenly come up with a “good” “revenue Neutral” tax – BTW has anyone, anywhere in the world actually seen a “revenue neutral” tax implemented?

  2. hc says:

    The revenue generated could be used to subsidise car registration or public transport. Its a way of selling a tax that targets a bad – congestion.

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