Increase in travel time relative to free-flow for CBD car commuters (source: Grattan Institute)

The case for congestion charging looks more and more compelling, due mainly to rising traffic congestion, the poor outlook for the fuel excise as a revenue source, the prospects for ‘mobility as a service’, rapid improvements in autonomous vehicles, and the dawning realisation that “we can’t build our way out of congestion”, whether with roads or public transport infrastructure.

That doesn’t mean there aren’t concerns. The most common criticism is simply that congestion charging would be very hard politically. I don’t think anyone disputes that but I’m interested in the instrumental objections, the sorts of arguments likely to be called into service in political debates. The objections I see raised most frequently and forcefully are:

  • It encourages more driving; if motorists can go faster, they’ll go further within the same time budget.
  • Congestion isn’t in any event a problem, so leave it alone. It’s a sign a city is doing well.
  • If drivers aren’t deterred by congestion, they won’t be deterred by charges.
  • It’s inequitable.

There’s some truth in all these criticisms but all changes have costs as well as benefits. Taxes on carbon or tobacco, for example, don’t come without downsides e.g. they impact those on lowest incomes the most (see Is it time to rethink how smoking is taxed?). It’s jejune to dismiss a possible change simply because it has some negatives; that’s the game politicians play. What matters for the public interest is evaluating the benefits against the costs, including considering who wins and who loses.

I’ve discussed the equity implications of congestion charging recently (Is congestion charging too inequitable?) so this time I’ll look at the other three key criticisms.

Congestion charging encourages more driving

Yes, motorists who pay the charge would indeed be likely to drive further on average given that the reduction in congestion increases speeds. That would happen whether the speed increase results from congestion pricing, from construction of new roads, or from improvements in traffic management.

I don’t think it’s a deal-breaker, though, for a number of reasons:

  • All the pricing proposals I’ve seen are aimed at increasing speeds enough to clear out logjams and get traffic moving at a modest speed that’s still well below the free-flow speed. The resulting increase in average trip distance is likely to be correspondingly moderate.
  • The extra travel would be offset in part or whole by those marginal drivers who respond to the charge by not taking the trip at all (it wasn’t worth it) or who shift to another mode e.g. train or bicycle. Some motorists will reduce the length of their trip in order to reduce the total cost e.g. going to a substitute destination that’s closer and hence avoids one or more toll gantries.
  • In any event, the benefits of longer trips must be considered along with the costs. Having the choice to drive further could mean, for example, that a worker has the choice of a better job.
  • If implemented as a city centre cordon as the Grattan Institute recommends, congestion charging wouldn’t contribute much to sprawl because the region that’s tolled comprises only a small component of a 30 – 60 km metropolitan radius. Few of those who work in the city centre drive from the fringe.

Congestion means a city is successful

It’s true successful cities tend to be congested. It’s also true congestion indicates infrastructure is being used rather than ignored. But congestion isn’t a cause of success, it’s a cost of success. Just like high rents, congestion is an unwelcome side effect – it increases travel time – of a concentration of activities.

And while it’s hard to deal with, it’s not inevitable. Congestion can be avoided, usually by increasing capacity, by suppressing demand, or by providing substitutes. We deal with congestion all the time, usually successfully. For example, if governments don’t build more trains and increase frequencies there’ll be continuing congestion on the railways. The same is true for lots of facilities and services; the demand for Grand Final tickets can be managed either by increasing the number of seats, by raising ticket prices, or in some cases by providing alternatives e.g. outdoor screen.

The problem with cars is it’s very hard to increase road capacity because most of the demand is in built-up areas where it’s very expensive to retro-fit motorways. In fact, there’s pressure to reassign road space for other uses e.g. public transport, cycling, recreation.

But the technology now exists to manage the demand for road space by time of day and location, either via a cordon system or via tracking the routes of vehicles. Provided the system is designed and managed efficiently, congestion doesn’t have to be inevitable and it’s certainly not desirable.

If motorists aren’t deterred by congestion, they won’t be deterred by charging

This is obviously a fallacy; of course higher prices deter consumption! For example, higher taxes are the key reason for the huge fall in smoking in Australia, from around 25% of the population aged over fourteen in the early 1990s to circa 12% now (see Is it time to rethink how smoking is taxed?).

The level of congestion in London dropped when the congestion charge replaced free driving within the central area. Critics say congestion subsequently increased but that’s due to shortcomings in the way the scheme is designed and managed; in particular, too many exemptions.

Another factor is that motorists don’t perceive congestion in the same way as they do a charge. That explains heavy vehicle drivers who rat-run through city streets to avoid toll roads like Brisbane’s Gateway Bridge, even though the value of time from the deviation far exceeds the value of the toll.

An important advantage of pricing is the level of the charge can be adjusted to deter the “last” 5% of drivers who tip a road into congested conditions. That can’t be done with congestion since all motorists pay the same for peak period road space i.e. nothing.


As well as the issue of equity, there are other objections to congestion charging that should be considered in evaluating its appropriateness for Australian cities e.g. the capital cost of infrastructure like gantries, road works and electronics would be substantial; the net revenue generated for other uses would be modest; the efficiency of cordon pricing schemes would be compromised; public transport couldn’t ever be an effective substitute for driving outside of the city centre. I don’t think these have the currency of the ones I’ve discussed above so ’ll leave discussion of them for another time.