Stephen Rees's blog

Thoughts about the relationships between transport and the urban area it serves

Andrew Coyne at SFU

with 5 comments

There is already a post on this blog announcing the talk this evening and with my initial reactions. I have have attached my notes below. I have also assembled a storify from the tweets that used the #movingthefuture hashtag

The evening was remarkably short, ending at 20:15. Usually these things go on until 21:00. Was Translink paying him by the minute? I also have the strong suspicion that he was reading a prepared talk, so it seems quite possible that a transcript may appear sooner than the SFU video which is promised “within weeks”. I would have thought a talk like this, which used no visual presentation materials at all could have been distributed as a podcast much faster.

My reaction then is what I am going to write first. He opened by disclaiming expertise – in this field or any other. Experts, he said, know very much more about much less. He knows less about very much more. He also has seemed to me, from his opinion columns, a convert to right wing politics, and in particular their love affair with markets and less government. For such people economics is delightfully simple and straightforward, for they only have familiarity with the basic concepts as set out in Economics 101. They seem not to have been listening when told that the market conceived of under Perfect Competition is an abstraction. It is an entirely theoretical construct used for didactic purposes: to explain what would happen under a set of highly unrealistic assumptions. You have to grasp that in in order to understand what comes in the later courses – which deal with the complexities and difficulties of the Real World.

I have been an advocate of Road Pricing myself – and covered that here. (There are 69 results if you do a search on this blog for “road pricing” (without the quotes). It would be a better way of allocating a scarce resource (road space at peak periods) than the one we currently use – queueing. But that is not to say that such a solution can be implemented easily or quickly. Road pricing might be a better way to deal with congestion – but that does not mean we can implement it here and now. Andrew Coyne did not deal with either here or now. He did not reference the provincial fiat: they are the only ones who can price provincial assets including the designated provincial highways. So the Mayors have been told that Road Pricing is effectively off the table at present. Indeed they themselves have said that while they recognize its potential usefulness they do not actually want it for at least five years in the the future. Like St Augustine is supposed to have prayed: Give me Chastity but Not Yet.

UPDATE Breaking News – according to a paywalled story in the Globe and Mail this morning Todd Stone is now willing to consider tolls and regional road pricing in the upcoming referendum (Posted at 09:08 Feb 26)

Secondly he was very selective in some of the evidence he cited. And in some cases I feel that he rather mislead the audience. For example he asserted that London Transport had halved the cost of providing bus service since it adopted contracting out. What he did not say was that this was imposed by a Conservative government at the national level with a stated objective of breaking the power of the trade unions. Most if not all of the savings came at the expense of the wages of those actually performing the service. The profits of the bus operating companies have been quite remarkable. Indeed that is also true of the railways. There the cost to the public purse has tripled. A franchise to run trains – such as that owned by Virgin – is a bit like a license to print money. It has been a lot tougher for the people who build trains. Only one UK manufacturer remains. The users also now complain of very expensive tickets and gross overcrowding due to underinvestment in very necessary additional rolling stock. Outside London Andrew Coyne conceded experience had been “mixed”. He failed to mention the complete absence of service in many rural areas, the dearth of off peak services everywhere and the consequential huge problem of social isolation.

He did concede that introducing prices on services now provided “free” like road space, hit poor people hardest, but that he said was simply an income problem. Easily solved by a commitment to give poor people more money. If anyone has ever come across a conservative politician who is actually willing to embrace this notion, please let me know. As far as I am aware the idea of the guaranteed income is anathema to every conservative and is no more likely to be introduced into Canada or BC than I am to be given a seat in the Senate.

UPDATE Todd Litman has posted to Planetizen that road tolls are fair and benefit the poor – with lots of references. He does not address region wide road pricing in this piece. He argues as follows

While it is true that a given fee is regressive (a dollar represents a greater portion of income for a poor than a wealthy person), road tolls are generally less regressive than other highway funding options because poor people drive relatively little on such highways: many poor people are retired or unemployed, lower-income workers often have local jobs that do not require highway commutes, and if they do commute on major travel corridors they are more likely to use alternative modes, or travel off-peak because they often have off-peak work schedules.

Saying “eliminate the subsidies” is easy: getting that to happen requires the enthusiastic cooperation of Stephen Harper and Christy Clark. They would also both have to support income supplementation for the poor. Does that seem at all likely?

Afterthought

I happen to be reading Sacré Blues by Taras Grescoe (it’s about Quebec) where I came across his assessment of Andrew Coyne – “the knee jerk conservatism of power worship”

———————————————-

Easing congestion in Metro Vancouver: Pricing without subsidies.

Traffic is strangling our cities – he produced a bunch of statistics which I am not a fast enough hunt and peck tapper to record. He did not note that driving in the US has been declining – something which is also evident here.

The costs of congestion are massive and growing

Commuting by car 85% of total nationally unchanged in twenty years

We use the most perverse system to ration road space – time
Building more roads also doesn’t work it induces traffic
Reduction in capacity produces less demand
Induced traffic also results from other measures. To the extent that they have been successful in improving traffic volume/delay that space is quickly absorbed by new induced traffic

Incentive requires rational mechanism – tolls
Smeed Report (UK 1964)
Roads represent a tragedy of the commons – people leave early to try to beat the traffic just as farmers drove their sheep onto the common to crop its loser before their neighbours got there.

Sprawl creates congestion

Many will object “I paid for those roads already”  but you haven’t paid for the space you occupy at peak periods. Each extra vehicle that joins a congested traffic stream has an exponentially worse impact.  Congestion exists on some roads and some times, so the toll that is needed is a congestion price. Willingness to pay for uncontested roads is demonstrated by the success of express highway lanes in California, HOT lanes in Minnesota and tolled autoroutes in France. Toronto has Highway 407 an express toll route that parallels a section of Highway 401 but offers a faster alternative to those willing and able to pay. The prices imposed on these roads are set at a level to deter enough new traffic to keep the flow moving smoothly. 

Do we need new roads? Can’t we toll existing ones? It a toll had been applied to Highway 401 maybe the 407 would not have been needed.

Cordon tolls are used in  London and Stockholm which were initially very successful but
have induced traffic within the cordon. Singapore had its cordon set up much earlier and now also applies tolls within the cordon on arterial roads

Why not toll every road all the time?
UK 2004 white paper for just such a system (summarized on wikipedia)
the netherlans and Oregon are both considering such schemes and trucks already pay this way in Germany and Austria

Many are concerned about the impact of specific road pricing by location and time on privacy. However that is already the case with the use cell phones. (It seems to me that the general reaction to the relevations by Philip Snowden on the use of this metadata by the NSA shows this asserted faith in cell phone companies is misplaced).

The biggest objection  is that prices are unfair to the poor. This is an income problem not a price problem. We do not in general try to fix the  price of food which would help rich and poor alike. (This seems to ignore US and European food agricultural policies) Equity issues can be dealt with through tax credits and other transfer payments

Buses would move better as a result of less traffic on the road. He felt that this improvement alone would be enough to create a beneficent cycle of growth of bus use without diverting revenue from tolls to transit. He felt a better use of the revenue would be to distribute the surplus as a dividend to all

Not same to use revenue to subsidize transit
There is no virtue in transit use
Unnecessary rolling roads produces better transit levelling the playing field

Transit use is still subsidizing sprawl

Not a good way to get to use transit. Better passenger experience, subsidies insulate operators. Value to society exceeds cost of provision. Thicket of overlapping subsidies.

Competition
Transit is not a natural monopoly
Experience in UK mixed

People make better choices when they know the true cost

Even a modest rp scheme would have some benefits
No free lunch or no free road

Q & A

1 After a impromptu poll of the audience which I think was supposed to show more people drive than used transit (it didn’t) Test of political bravery. (I think the questioner should have stuck to the track record of politicians unwillingness to try road pricing – there are plenty of examples)

We are at least now talking about this, which was not the case a few years ago. There is a lot of  spadework needed but “the answer is staring us in the face”
Cash grab objection

Political leadership Mayors council says 5 years out

Partial scheme like only tolling one bridge real problems

Eric Doherty:  climate change costs wide range of damage costs of GHG makes congestion cost look trivial

Carbon tax is a separate instrument
Road Pricing (RP) benefits car users

ED: In Zurich all surface transit has exclusive lanes. There even bankers use transit as driving is so slow by comparison

The best thing for transit is take the subsidy out of driving

Clive Rock: we only have a  weak regional entity, and provinces don’t do cities well. We need a
champion for RP who has to have stature. We have to review our institutional structures – municipalities were compared to warring tribes

AC admires the GVRD model and called it  “civic federalism”. He also warned of the penalties of amalgamation and the possibility of getting a Rob Ford instead of an RP champon

The Centre for Dialogue at SFU has been consulting on this issue and found that citizens want fairness and choice. They also preferred that RP be distance based. She also observed that the
capital cost of rapid transit can’t come from the firebox [By the way you can get a pdf file of the report from the SFU Centre for Dialogue]

People will have options and choices
Give poor people more money
Don’t need to subsidize transit
Can borrow or raise on equity markets for private sector transit investment
Transit is only really “needed” if it can be financed commercially

Externalities … Is there a societal benefit from transit use?

Q There are very few places where transit is profitable

By pricing roads you change the options

We are subsidizing sprawl not good public policy

Dense cities built before transit

Make transit better self reinforcing cycle

Affordability guaranteed income without that inequalities

Fixing prices does not target help

Trying do social justice on the cheap

Collective responsibility on the tax and transfer system

Fuel tax does not address congestion

Q BC had a huge amount of trouble getting changes eg carbon tax

This is a local fix and an easier sell than carbon tax
Achievable with a phase in period but there will be life investment upheaval

Richard Campbell: In this region there has been over optimism in tolls on bridges

Which shows the danger of partial solutions It also demonstrates that you can’t be sure of how much revenue you will get, so that is another reason not to rely on RP to fund transit expansion

20: 15 close

5 Responses

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  1. I have pretty much liked this talk. the part laying down the rational for road pricing, consequence on transit efficiency, and acceptability of the scheme, reflect pretty much what has been said here http://voony.wordpress.com/2011/03/22/some-toll-economics/

    I also fully agree that the “road pricing will hit the poor the hardest” argument is a redherring…

    I will also notice that People invoking this excuse are also generally the one supporting the gas tax statu quo, whereas poor drive a gas guzzler clunker, while the feel good rich will drive a Tesla…

    Andrew Coyne is right::
    Don’t let social issues detract market based solution.

    That is not ignoring them…but social issues need to be addressed independently.

    It is not because some people can’t afford market housing price that everyone has to live in social housing
    It is not because some people can’t afford a bus fare, everyone should get a free ride

    for road pricing,
    – social issue could be eventually addressed, by providing a “mobility allowance” (which could be used to pay toll or transit) to low income household.
    -and more generally, a free trips allowance could be implemented (to address “fairness” issue with out of province vehicle hard/expensive to bill)

    but all that should not be a starter point of a road pricing discussion.

    Voony

    February 25, 2014 at 11:08 pm

  2. I have also appreciate the emphasis to disconnect road pricing of transit. both being two seperate issues.
    It is something I have argued for long and more especially here:
    http://voony.wordpress.com/2011/08/15/congestion-charge-the-case-for-vancouver/

    Where I will diverge is on the “necessary” market competition (“Abolist Translink and bring up the jitneys”).

    It is where come the social good (or all what make our quality of life).
    Mobility in general can be also considered as a social good, you want to keep it as affordable as possible

    The goal of road pricing is to to get the best use of the road network. If you value mobility as a “social good” you want to keep it as affordable as possible, it is where transit (and cross subsides) come in play,

    There is cases where letting service providers competiting in an open market, provides socially sub-opimal solution (one reason is that no player can be strong enough to do the necessary capital investment, which overall improve the general level of service).

    e.g, to cross a river, He could be a market for 5 ferry companies to survive, but the market can be barely good enough to justify only one bridge…Noone gonna build a bridge unless it is granted a monopoly on a fixed river crossing…

    That is pretty much the reason why transportation (capital intensive and unmovable asset) is usually mainly a monopoly affair…
    that said, operation of such monpolies can be open to competition (concession):
    That is how all public transit network work in Europe as redfrog as already mentioned here), as well as most of the french toll freeways, as mentioned by Andrew Coyne.

    Voony

    February 25, 2014 at 11:53 pm

  3. I do not value mobility as a social good. I enjoy it personally – but what I think we ought to be planning for is much greater accessibility – which is quite different. We make far too many, too long, motorized trips. That is not good for us or the planet, and we need to reorganize how we do things to make use of personal automobiles much less of a necessity or more of one of many choices. As things are right now, thanks to separated land uses, suburban sprawl and inadequate transit, walking and cycling outside of the urban core there is not nearly enough realistic choice in trip making. And imposing road pricing prior to that happening is a recipe for disaster.

    Stephen Rees

    February 26, 2014 at 1:15 pm

  4. […] Blog post from Stephen Rees on his impressions of the talk […]

  5. […] lecture generated a very interesting conversation about mobility pricing. Stephen Rees built a storify of the tweets posted during and about the lecture. He was very kind to let us post […]


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