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Urban Road User Charging Online Knowledge Base
Equity & Liveability
Considerations of road pricing and equity deal with two main themes: How to allocate the burdens of charges and how to distribute the benefits. Both burdens and benefits may be allocated according to several different distributive principles, thus making equity considerations very complicated.
Experience from Norway has shown a multitude of ways to approach "fair" and acceptable charging schemes. One important point is to relax on the ambition to design "optimal" schemes, in a way that responds to important con-arguments and reduces opposition. The following features were included in the 1991 toll ring:
The "one hour rule": Only one crossing per hour is charged, partly due to claims that parents bringing children to kindergarten before travelling to work would be unduly hurt if charged for several crossings.
Disabled drivers are allowed free crossings.
A charging system with free passage after 5 pm and in the weekends. The "equity argument" was to avoid charging "social travel", e.g., visits or accompanying children to activities.
The most difficult equity issue has been where to locate the toll stations in a "fair" way. The 1991 ring was a compromise between fairness arguments, practical considerations and revenue maximisation. The fairness aspect indicated that motorists benefiting from the new infrastructure should have to pay.
The development of a revised tolling scheme (implemented in 1998) was propagated as more fair, by charging a higher proportion of the motorists. (Raising more revenue for infrastructure was the other main argument). The zone system implied that the number of total households in Trondheim that paid toll charges during one ordinary (randomly chosen) working day increased from 28% to 42%. After this revision, there was still much public debate on how to improve the "fairness" of the system.
An assessment of the distributive effects of road pricing must take into account how revenues are spent. A redistribution of revenues to the car users (e.g., by lowering the car purchase tax) is not necessarily "fair" because there will be winners and losers among the motorists. Road pricing is prone to equity based opposition because high-income motorists and commercial traffic (valuing time savings higher than the fee) constitute the most likely "winners". "Losers" are likely to be found among low income, car-dependent households.
The most common suggestion on how to compensate losers is to use revenue to improve public transport. In Trondheim part of the revenue is earmarked for public transport infrastructure, as well as investments in walking and biking facilities. Furthermore, city centre retailers have been "compensated" by investments improving the environmental quality.
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