Livingstone on congestion charges

Writing an intervention in the NY Times, as NYC contemplates a congestion charge of its own, London Mayor Ken Livingstone makes the case based on London’s experience. A key success factor is the channeling of revenues from the tax into enhancing public transit, another example of offsetting regressive tax impacts on the spending side:

… In 2003, London put in place a £5 (about $9) a day congestion charge for all cars that entered the center city (the charge is now £8). This led to an immediate drop of 70,000 cars a day in the affected zone. Traffic congestion fell by almost 20 percent. Emissions of the greenhouse gas carbon dioxide were cut by more than 15 percent.

The negative side effects predicted by opponents never materialized. The retail sector in the zone has seen increases in sales that have significantly exceeded the national average. London’s theater district, which largely falls within the zone, has been enjoying record audiences. People are still flocking to London — they’re simply doing so in more efficient and less polluting ways.

There has been a marked shift away from cars and into public transport and environmentally friendly modes of travel. There has been a 4 percent modal shift into use of public transport from private cars since 2000. Simultaneously, the number of bicycle journeys on London’s major roads has risen by 83 percent, to almost half a million a day. Cycling has become something of a boom industry in London, with improvement in health for those involved and substantial benefit for the environment.

This success had preconditions. [A]n enhanced public transportation system was critical. To ensure readiness, we made significant upgrades to public transport. Our investment focused on enhancing London’s bus system, rather than the subway, because we needed to increase capacity in the quickest, most cost-effective way.

Specifications for a modern, more comfortable fleet were introduced, bus lanes were added, and more inspectors were put on to ensure buses ran at regular intervals. With London’s buses a more attractive alternative, the number of bus trips a day has risen to six million, an increase of two million from 2000 — with ridership growing most rapidly among the highest-paid social groups. In turn, this helped relieve pressure on the subway, ensuring it continued to run smoothly. Investment in public transport continues to this day, aided by the revenue from the congestion charge — the equivalent of some $200 million annually.

… London’s congestion program initially met with some skepticism. Before the program began, polls showed that public opinion was divided almost exactly evenly. Since then, opinion has shifted to 2-to-1 in favor.

The results have led us to expand the initial program. In February the existing congestion charging zone was extended westward, doubling its size. Traffic in the extended zone fell by 13 percent.

The next stage of congestion charging in London will be a move to emissions-based charging. This will be aimed at deterring vehicles with the highest carbon emissions, like sports utility vehicles, from entering the city center. The new program will impose a payment of £25 per day for such vehicles, as well as abolish the 90-percent exemption that their owners would receive if they were residents of the congestion charging zone. Incidentally, this charge for S.U.V.’s enjoys 3-to-1 popular support.