Equity and Congestion Pricing
At the Friday Transportation Seminar on October 25, 2019, Michael Manville discussed Equity and Congestion Pricing. The lecture was fantastic, and time-strapped readers can find a written post that hits many of the key points.
Manville begins his lecture focusing not on congestion pricing but asking a more key question – how equitable is our current system? Do free roads serve the poor? Rightly, he concludes that the current system disproportionately benefits with wealthy and burdens the poor. First, everyone is caught in congestion currently, rich or poor. But not everyone is equally caught in congestion. Rich can choose to live in more accessible neighborhoods and choose to drive, whereas low-income households are increasingly displaced to the suburbs and to congestion. The freeways are routed through low-income neighborhoods and bring their major health impacts to those neighborhoods, from increased asthma to low birth weights. These health outcomes primarily fall on the poor. Further, low-income households are already less likely to drive, so free roads do not provide any benefit to them, whereas high income households are more likely to drive and use the free roads. Our existing system is not equitable.
Congestion pricing, if implemented, would charge road users. One of Manville’s points about road pricing is that we do not currently have any charge specifically for road access. Gas taxes may seem to be about driving, but really they are a tax on the negative externalities of burning gasoline. The actual usage of our roads is generally unpriced, but it should be. By not pricing road usage, we do not send appropriate signals. Manville points out that many people take non-essential trips during rush hour because roads are free. Congestion can be managed if just a small portion of road users shift their travel decisions, whether it be their route, their mode, or the time of travel. A price signal can lead to that change and improve traffic for everyone.
Now, the actual payment of that price signal would be inequitable without another intervention. Charging the same rate for everyone results in low-income households paying a disproportionate share of their income in congestion pricing. Further, congestion pricing is likely to impact the low-income workers who have no choice but to drive; they would be driving because there are no alternatives. Some advocate for utilizing the revenues for enhanced transit service; this may work, but only if it is able to reach these households that currently do not have transit options. Manville, though, prefers to address the inequities in the payment of congestion pricing through another method: a social service payment. His point is that this is something we are already good at! Food stamps (SNAP), Medicaid, etc. are all programs that are well administered and accessible to low-income households. Government should be able to take that on with little issue. Lastly, implementation can be done in a transitory way that builds toward full implementation in order to give households a chance to prepare. For example, a Department of Transportation can price one lane, and then expand a lane every year until the full road is priced. This would allow households to move to a more convenient location or make other changes in preparation.
Ultimately, the seminar helped convince me that, while the paying of the fee can be inequitable, there are simple programs we can adopt to address that. Moreover, inaction and maintenance of the status quo is the real inequity, and until we address that, low income community and communities of color will continue to be burdened and hurt by free roads.
Manville begins his lecture focusing not on congestion pricing but asking a more key question – how equitable is our current system? Do free roads serve the poor? Rightly, he concludes that the current system disproportionately benefits with wealthy and burdens the poor. First, everyone is caught in congestion currently, rich or poor. But not everyone is equally caught in congestion. Rich can choose to live in more accessible neighborhoods and choose to drive, whereas low-income households are increasingly displaced to the suburbs and to congestion. The freeways are routed through low-income neighborhoods and bring their major health impacts to those neighborhoods, from increased asthma to low birth weights. These health outcomes primarily fall on the poor. Further, low-income households are already less likely to drive, so free roads do not provide any benefit to them, whereas high income households are more likely to drive and use the free roads. Our existing system is not equitable.
Congestion pricing, if implemented, would charge road users. One of Manville’s points about road pricing is that we do not currently have any charge specifically for road access. Gas taxes may seem to be about driving, but really they are a tax on the negative externalities of burning gasoline. The actual usage of our roads is generally unpriced, but it should be. By not pricing road usage, we do not send appropriate signals. Manville points out that many people take non-essential trips during rush hour because roads are free. Congestion can be managed if just a small portion of road users shift their travel decisions, whether it be their route, their mode, or the time of travel. A price signal can lead to that change and improve traffic for everyone.
Now, the actual payment of that price signal would be inequitable without another intervention. Charging the same rate for everyone results in low-income households paying a disproportionate share of their income in congestion pricing. Further, congestion pricing is likely to impact the low-income workers who have no choice but to drive; they would be driving because there are no alternatives. Some advocate for utilizing the revenues for enhanced transit service; this may work, but only if it is able to reach these households that currently do not have transit options. Manville, though, prefers to address the inequities in the payment of congestion pricing through another method: a social service payment. His point is that this is something we are already good at! Food stamps (SNAP), Medicaid, etc. are all programs that are well administered and accessible to low-income households. Government should be able to take that on with little issue. Lastly, implementation can be done in a transitory way that builds toward full implementation in order to give households a chance to prepare. For example, a Department of Transportation can price one lane, and then expand a lane every year until the full road is priced. This would allow households to move to a more convenient location or make other changes in preparation.
Ultimately, the seminar helped convince me that, while the paying of the fee can be inequitable, there are simple programs we can adopt to address that. Moreover, inaction and maintenance of the status quo is the real inequity, and until we address that, low income community and communities of color will continue to be burdened and hurt by free roads.
Thanks Rob for a great breakdown of this lecture. I was also persuaded by Manville's points on congestion pricing. As more places around the world (and potentially Oregon) considers implementing pricing schemes I think it will be even more important for transportation planners to address those equity concerns with clear and succinct arguments. I do think that we can address equity by rerouting revenues toward other services that benefit low income groups, but I worry that the political messaging around this strategy may be tricky. I think part of why the gas tax "works" is because people intuitively get that people who drive more should pay more; the flow of money is easy to understand, and it all stays within the confines of transportation. I worry that if the revenues would be rerouted to SNAP, (just as an example) the public may find that confusing, regardless of how helpful that may be. I raise this as a small point, because I think Manville's reasoning is sound overall. I just wonder if there are transportation-related subsidies in addition to transit subsidies that the revenues could fund that would offset the inequities to lower income groups caused by congestion pricing? Maybe a combination of transit AND vehicle maintenance subsidies? Sewer + utilities infrastructure in East Portland?
ReplyDelete-Phil Longenecker
Thank you Rob for sharing this. There has been a lot discussion on congestion pricing in China. A survey I read about in Beijing from 2016 to 2018 showed that about 30% of the participants (around 30,000 people surveyed ) were against congestion pricing. This proportion is actually lower than cities like London and Milan. The survey also found a clear difference in the groups for and against congestion pricing. People against congestion pricing are more likely to be long-distance commuters, living in the suburban, and these people are generally older than the group supporting congestion pricing. I'm not sure if there's any finding like this in Portland or other US cities, but it would be interesting to look at. In the Chinese context, I think one of the important issue is the transparency and clarity of the usage of this part of revenue, just as Phil mentioned. I think that it would also make sense if this congestion fee are later put into building more public transit and making public transit more affordable for the lower-income group to access, providing an alternative to driving.
ReplyDeleteHi Rob,
ReplyDeleteInteresting share on equity and congestion pricing. I think you pointed out an important question from the seminar, "how equitable is our current system?". I have to agree with the speaker and you about how our current system disproportionately benefits the wealthy while the poor pay the price. I'm glad you brought up the fact that the poor are the ones who bear the expense of unfair and unjust health outcomes from our existing system. More often than not, low-income families have to live near areas with noise and high pollution.
I find the idea of charging for congestions fascinating. I do think that there could be some benefits in doing this, but I would be concerned about how the price would be set to keep things equitable for others, as you mentioned.
It becomes an issue because there is a considerable problem with charging everyone the same rate. I do think that there could be some government intervention here, but I also don't think that just using food stamps (SNAP), Medicaid, etc., could be a full solution. Those systems leave out some low-income people (immigrants/refugees who are often not eligible for these programs due to citizenship status.) The government would need alternative ways to find low-income households under this category to avoid them being disproportionately impacted by congestion pricing. For that reason, I start to question whether we can implement congestion pricing without bringing forth additional inequities to those who are already at a burden with our current system.
A PSU team was working with Portland to help understand what an equitable Electric Vehicle strategy might look like. As part of that we looked at how much different people in different neighborhoods were driving. One finding that stuck out was that wealthier households living in denser neighborhoods were able to reduce their vehicle miles traveled, presumably by taking advantage of other options like transit commuting, bicycling, and local shopping, while lower-income households were not to the same degree. We've been so focused on "choice behaviors" in the past decade or so that we've lost track a little of "no-choice" options often faced by disadvantaged populations. I think there could be real potential for a well-designed road pricing policy to benefit groups "stuck driving" until the slow overhaul of the post-Interstate system hopefully provides real options.
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