Road Pricing and Capacity Investment: Some Recent Analyses

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Road Pricing and Capacity Investment Some Recent
Analyses

• Prabhat Vaze
• Department for Transport

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Overview

• Overview of road pricing
• Design of policy at the local level
• Recent strategic analyses

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Relating charges to congestion costs

• At congested times, a road user imposes delays on
  others
• Pricing to reflect the congestion internalises
  externality
• Response leads to congestion fall
• Responses include mode switch, time-of-day switch
  etc.
• Complementary capacity improvements

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Analytical challenges

• Identifying the problem
• Establishing whether demand management helps
• Packaging with complementary investments
• Particular analytical challenges of charging
• Distributional aspects of costs and benefits
• Implementation of schemes, e.g. costs, technology
  etc.

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The case for road pricing

• Benefits from congestion charging have been
  estimated
• Idealised, benefits maximising case modelled
• Below the seminal DfT Road Pricing Feasibility
  Study

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Overview

• Description of road pricing
• Design of policy at the local level
• Recent strategic analyses

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After Road Pricing Feasibility Study

• London and Durham in operation for 4 years
• Departments Congestion Transport Innovation Fund
  
• Fund business case development
• Package of demand management and capacity
• Ten authorities receiving pump-priming
• Transport Innovation Fund operating to 2015

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Partnership of TIF Congestion

• Department initiated a Transport Innovation Fund
  for pathfinders
• Departments liaison and support of scheme
  development
• Business case design in the context of
• Public attitudes
• Issues of delivery, fairness, extent of
  congestion
• Complex set of packages of interventions

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Analytical guidance on road pricing

• Existing body of transport analytical tools and
  expertise
• Demand management guidance developed
• Modelling likely behavioural responses
• Pricing to reflect congestion
• Social/distributional aspects
• Staged process of business case development

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Evidence helping to design schemes
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Stages in developing schemes

• Development of business case only part of process
• Public acceptability and communication
• Drawing in key stakeholders
• and technology, procurement, inter-operability

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Overview

• Description of road pricing
• Design of policy at the local level
• Recent strategic analyses

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Background

• Transport modelling forecasts to 2025
• Official estimates of key drivers, such as GDP
• Multi-modal, national transport model
• Strategic modelling for policy analysis
• Note the uncertainties around such forecasts
• Developments since previous analysis include more
  geography, wider benefits

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DfT Analysis

• Published alongside the Eddington Study
• Details strategic modelling work on road pricing
• Builds on road pricing feasibility study

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Marketising congestion

• Pricing reflects marginal external costs
• Delay imposed on other road users by additional
  trip
• Carbon, safety and other external impacts
• Idealised pricing modelled
• Gives an upper bound on benefits
• No consideration of operating costs
• Consideration of lost hours

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Forecast without road pricing
2025 Baseline lost hours
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Forecast with charges reflecting costs
2025 Baseline with National Road Pricing lost
hours
2025 Baseline lost hours
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Road Investment

• Economically justified level of road build
• (Simplified) modelling of decision to build
• Impact of RP on level of economically justified
  road build

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Road Investment
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Road Investment
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Road Investment
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Road Investment
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Analytical challenges

• Moving from idealised road pricing to real world
  schemes
• Improving multi-modal nature of modelling
• Analysis of packages