An Equitable
Electronic Road Pricing or
Congestion Rationing Model.

As the metropolitan and country road networks around the World age more funds need to be directed towards infrastructure maintenance which will tighten funding for new capacity. Concurrently the alternative of constructing more additional new road capacity is also becoming politically unacceptable, environmental undesirable and financially infeasible. All this makes it more difficult to provide the necessary capacity to absorb spiralling mobility demand. Economists traditionally argue that demand will continue to outstrip supply as long as the users daily decisions do not take into account the full cost of their consumption of limited road space.

The many road pricing schemes currently under trial in Europe and being implemented in Asia work on charging the user cold hard cash for every trip. There is an equity objection that road pricing is a way of "the rich paying to get the poor off the roads". Making the user pay for something that they regarded as effectively free to date, looks like more taxes by another name, and in Australia and North America utterly politically unacceptable. Besides the economic perspective, rising congestion with its contribution to air pollution, is also a major environmental concern. Greenhouse reduction targets will only be achievable with the most efficient use of internal combustion engines. Traffic jams and stop-start crawls through peak hours are a luxury the cities in particular and the World at large can no-longer afford.

The initial problem then is, how to give the road user price signals (related to the true and full cost of growing travel demand) that will encourage a reduction of stress, to the network capacity and the environment, without the arbitrary imposition of inequitable new taxes. The greater problem is how to mobilise public opinion in favour of any resulting scheme. Historically the most effective method to win public approval is to an arrangement where they perceive a net benefit to themselves. We are not talking here about some vague economist's notion of net public welfare to a social class, but rather direct benefit to individual voters. Currently road user pay registration and petrol taxes for access to a network that they then perceive as free there-after. If the network's ideal (efficient free-flow) capacity is nominally capitalized and distributed equally to all registered motorist, then they have a more tangible stake in the efficiency of the networks usage and upkeep. This nominally equity / rations of "RoAd utilZatiOn Options" or "Razoos" (Australian , New Zealand slang for a negligible amount of money) could also be made a trade-able commodity in a market, in much the same manner as pollution credits are now traded in the USA.

So then rather than Road Pricing being a tax on access, it would be transformed into a mechanism to ration congestion instead. The Razoo market then allows congestion traveler, to buy extra rations for the joys of participating in larger share of traveler than their fellow more prudent traveler. Allowing demand in the network, thence market place mechanisms to set the price of the traded Razoos. The prudent traveler would be free to spend their spare Razoo allocation on other approved activities that would aid the lowering of congestion;- public transport fares, smaller more environmentally friendly cars, higher density housing etc. The approved seller would then realize the nominal cash value (and a possible premium) of the Razoos in the market place by selling them on to motorists that desire more Razoos. The government and scheme operators would also be players in this market, raising required funds from the difference between the total Razoo market supply and the rolling annual free allocation of Razoos to the users. Environmental objectives could then be encouraged by adjusting the size of the total Razoo market over time, in line with environmental developments. Any excess demand for Razoos will drive the market price up, thus encourage transport efficiency, environmental responsibility to the degree that the market is unwilling to pay for flouting such aims. Politically this arrangement is highly effective, as the government is not seen to be imposing taxes, but rather reaping a windfall in the market place at the expense of the morally indefensible position of congestion junkies and polluters.

The road user would receive their annual (or 6-18 monthly ) Razoo allocation directly into their personal account, on their allocation-date, or when they renew their license, or first vehicle rego in year (depending upon operational conditions and policy analysis decisions in the priced area). The allocation is periodical as the Razoos conceptually are a perishable item, what one does not use within the fixed time allotment, vanishes with the next allocation. The Department of Roads and or Transport may choose to offer refunds on registration or license (to their full value, effectively making rego etc. free to low impact users) for unused Razoos at some fixed nominal rate (as expired Razoos would be worthless in the market place). Users would also be issued with a smart-card onto which they could down-load enough Razoos for their immediate needs, like filling a car with petrol. Depending on policy the smart-card could be their photo-license, or vehicle-permit. Down-loads should be effortlessly secured from Automatic financial instition and phone-company Teller Machines (ATM) or via Petrol smart-card from petrol stations etc.. Private purchases being effected by the operator transferring extra Razoos into your personal account on receipt of payment. Each vehicle in the target area fleet is equipped free by the scheme operators with an "In Vehicle Unit" (IVU), the scheme operators funding the equipment roll-out from the Razoo market allocation gap. The driver or a passenger (encouraging ride sharing and car pooling) put their smart-card charged up with Razoos into the IVU which debits the smart-card as the vehicle is driven around the network.

The envisaged system uses beacons / transmitter to broadcast on a common bandwidth / channel a signal as; infra-red, or packet-switched phone, or low-frequency radio over the whole road-way (all directions of travel) at discrete locations.Each time the vehicle comes to a specially equipped intersection or other beacon location it receives the local update about beacon identification and the cost that will be incurred in the travelling to the surrounding beacons. When the vehicle arrives at the next beacon along its route the smart-card is automatically debited at rate broad cast from the previous beacon to travel to this beacon. This operation means that only the smart-card in your vehicle's IVU knows where it is, and where it has been. This scenario avoids the major privacy invasion of American tag / transponder Electronic Tolling Systems where the operator for billing and audit purposes has to keeps records by time and place of every-ones movements through the network.

Because the transactions in these beacon schemes Razoos system are one way from the beacon to the vehicle via the selected communication technology, the paraphernalia of numerous gantries required by most overseas Electronic Road Pricing systems is also substantially avoided. The lack of gantries besides being a significant implementation saving, also reduces fears of "Big Brother is Watching You". Enforcement could be accomplished culturally sensitively, by a road side random Razoo check activities similar to Police Services random breath test operations. Or remotely with standard Electronic Tolling Enforcement strategies (number-plate capture cameras and closed beam readers). Enforcement activities being funded by the operators from the Razoo market allocation gap. Shadow tolling (directly charging a central authority for counted vehicle) of bridge and tunnel crossing or tollways and private motorways could likewise be funded from the Razoo market allocation gap. (Razoos left to sold in the market after annual user allocation)

Occasional visitors from out-of-area, (if from a policy perspective it is considered necessary or desirable) would be able to purchase day passes / transponders at the limits of the road-priced network. Regular visitors from neighbouring regions like, commercial transporters, could either be exempted, or register for a reduced allocation, or directly charged (in which case they may find it more cost effective to purchase an IVU and a small supply of Razoos).

AuzGnosis Pty. Ltd. ACN 087569391


    Last update: Saturday, 17-March-2001


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