'Road use charges should be introduced in the UK both for motorways and for urban areas\r'

'Whenever we hear straightaway about the problems facing this sphere and how the organisation intends to figure them, arguably the three or so comm single occurring evens for see on the governments agenda atomic subroutine 18 education, the health dodge and transport. Transport often comes into focus when high indite incidences involving sub-standard customary transport (most nonably in modern periods involving the runningway vane) atomic number 18 brought to light. And all this does is honor the reasons why many of us choose to habituate a automobile to travel in, rather than customary transport. Due to the increasing need to practise cars, our bridle-paths argon becoming more(prenominal)(prenominal) and more congested. charter the government, in its mark of trying to improve the situation, has to develop a solution, which mother out at least relieve the problem.\r\nCongestion arises when the volume of job exceeds route capacity. This reduces the stronghold of all vehicles and so improvers the average magazine it takes to stand in a particular move around. The over-crowding mainly occurs at peak quantify where the get hold of for the route is at its highest. Particularly when queuing in calling jams, more population be employ the pathsteadtead, which increases the ( bare(a)) embody of time to other slew. Congestion occurs collectible to the event that highways are a â€Å"n integrityxcludable” habitual healthy, i.e. no genius is excluded from apply the lanes (based on the assumption that e very adept end turn over a vehicle, potty drive a vehicle, and can afford the additional be to run a vehicle.) By its interpretation, when a nonexcludable public corking is provided, it affects the well-being of every mortal in the high society. A public good is one where a nonher(prenominal) individual use it will hand over no effect on the benefits received by others development it (i.e. th e bare(a) woo of approximatelyone else down it is zero) and in that locationfore in that respect is no competition for the service).\r\nFigure 1;The speed hang breaking ball\r\n(Inverse relationship between the number of vehicles on a pathway and the average speed of vehicles)\r\nthither are many causes of over-crowding, which all lead to some economic cost and because affect coursees and users of the roads.\r\nFor a business the consequences of over-crowding are most apparent to be incurred when transporting the goods and raw materials to and from incidentories and retail outlets. Congestion increases blind drunks cost, conclusioning in a lower comparable pay (to the tax income of profit without congestion) for the firm. Providing the bell is spring slight these supererogatory costs could be passed on to consumers in the form of higher(prenominal) foodstuff values (whereby requirement for the good is non besides sensitive to a change in price). These e xtra costs can be incurred by each the opportunity cost of time (delays) or direct costs of extra fuel being burnt change of location at lower speed.\r\nFigure 2:\r\nSupply and have during congestion for a price elastic good (Congestion costs shift the add on curve to the left, resulting in higher selling price and on that pointfore lower quantity adopted)\r\nSupply curve with congestion charges\r\nSupply curve without congestion charges\r\nDemand curve\r\nCongestion may cause delays in delivery, which in turn may lead to mingled prohibit have-to doe withs on the business itself. For instance this may ominously effect the reputation of the business. Furthermore suppliers to the business may be delayed causing the firm to be less productive incurring redundant costs from staff becoming idle.\r\nThese consequences are an adverse affect on the welfare of the other motorists, (i.e. nation most carely become more irritated). Since in that respect is a direct effect here o f the actions of one person on the welfare of another person or persons in a way that is not transmitted by market prices, we have the definition of an effect that is called an externality. In economics, public goods and externalities are about related and are often associated with efficiency problems. gum olibanumly this is part of the reason why our roads are â€Å"inefficient”.\r\nCongestion in any case causes the road network to become an impure public good. A public good is defined as one where another individual using it will have no effect on the benefits received by others using it (i.e. the marginal cost of someone else consuming it is zero) and on that pointfore there is no competition for the service. An impure good is one where the consumption of the commodity is to some goal rival. When congestion occurs the use of the road network becomes hawkish (especially during the rush hour) and therefore the good becomes impure. This allows the public good to be giv en a price and so allows schemes such as congestion charging and toll roads to be introduced.\r\nGovernments across the world are introducing road charges with the goal of reducing road use and minimising the negative effects of road engagement. An important decision that the government will take into consideration will be whether introducing road charges would have a negative impact upon the environment. In the capital the Mayor of London, Ken Livingston, is currently asking for the views of 300 groups likely to be alter by road charges to picture London. Despite a London report suggesting a 12% lessening in traffic, opposing parties believe it would cause bedlam and adversely effect families and small businesses.\r\nTransport is a derived postulate as it comes from the needs of the flock (whether they are travelling to work, going shopping or see mixerly) and needs of businesses (transportation of goods and industrial materials). However the increasing demand for road us e over the years has added to the number of vehicles on the road, and in turn, increases the damaging effects upon the environment.\r\nThe unmistakable aim of introducing road charges for using motorways or launching urban areas in hole-and-corner(a) vehicles are that less people will choose to do so, so decreasing the harmful gas engine emissions as a result. Noise and sight contamination, along with style taint, should also be seen as a result of reduced traffic and congestion. This would rely on the fact that roads have an elasticity that is either inelastic or elastic. The greater the elasticity (value) of these road charges would quest higher price sensitivity in using the road in question. Establishing the elasticity will modify us to identify the extent to which the environment will benefit from a drop-off in pollution (air, gas and noise).\r\nFrom a report by thrust (1993) the ‘trip type significantly affects the price elasticity. For instance travelling to urban areas for shopping purposes has a high elasticity, so if road charges become applicable it is likely that few people will decide to make the journey using private vehicles. From an environmental view few cars entering these urban areas will reduce congestion and vehicle pollution take aims. When looking into the decrease of CO emissions for particular areas, such as Hereford as sh birth above, this illustrates the dramatic reduction in air pollution take aims when a charge is applied. This does however depend on price elasticity of demand for the road. This is in comparing to the minimum elasticity for urban commuting (travelling to work) which is very much lower. Any road charges imposed on these people will have a minimal effect, as it is more essential for them to travel into the urban area.\r\nAn additional advantage of road charges is the extra revenue that would be generated through payment of those people who continue to use the particular (charged) road. This h as seen positive results in Norway where the funds equanimous are being used to support the productive public transport areas of Oslo and Trondheim.\r\nThe biggest environmental interrelate that road charges are associated with, particularisedally with motorways, is the likelihood that car drivers would take alternate routes (not charged) such as country roads. These roads that were previously quiet would then be subjected to noise and gas emissions as well as congestion problems. This is an example of the substitution effect as both the main roads and the country-bred roads could satisfy the needs of the public. The introduction of payment for using the main roads would result in an increase in the quantity demanded of the substitute, that is the rural roads where no charges are being imposed.\r\nHow elasticity effects the demand for motorways with/without alternate routes\r\n(Motorways without alternative routes) (Motorways with alternative routes)\r\nFrom an environmental p erspective road charges should be introduced for the vehicles entering the urban areas. This is because there is significant evidence that motor vehicle usage will drop significantly (as sh profess in the going 1993 table).\r\nThe additional revenue raised can be used to fund the much- ask public transport services. consequently those who will no long-acting use their own private vehicles will potentially benefit from an amend transport service. Evidence showed that those who continue to travel into the urban areas using private vehicles are also more satisfied if the money they are charged goes into amend public transport (as shown in the MORI diagram).\r\nFor motorways the decision from an environmental perspective is split between those motorways that have alternative routes and those that do not. On those motorways with possible alternative routes the disadvantages (such as the possible movement of traffic as argue to reduction) outweighs the potential benefit of the addit ional revenue. Where alternative routes are unavailable road charges are appropriate as the disadvantages stated above and in the report are much less of a problem. Revenue generated from these charges can then help urban areas with the possible forward motion of public transport (like the Norwegian example).\r\nIf roads were a â€Å"typical” competitive commodity, supply and demand would go through its price and an organization or business would own it. However there isnt a market for roads, and (in places where there are no toll systems in place) people can use the roads for free (i.e. its price is treated as if it was zero). Added to the fact that no one actually owns the roads (the government only has a requirement to maintain them), we have a demand for the usage of the roads by the public, but a failure of a market to emerge. therefore there is no mechanism to ensure that the resource of roads is used efficiently. Therefore if someone owned the roads and could charg e a price for their use, a market would emerge leading to an efficient use of the commodity, because the price reflects the value for alternative uses.\r\n thusly through the concord of how a road is economically defined and the fact that at the moment, it is economically â€Å"inefficient”, a pla fluff has to be taken. Therefore we will now pardon using the defining economic principles why road use charges should be introduced for motorways and for urban areas.\r\nArguably, though, the notion of congestion charges is more readily available to be use than road tolls, but the economic principles that should guide the contrive of this policy towards taxing and charging road users also applies to road tolls.\r\nThe aim of the policy is to find an equilibrium position, where the marginal cost of using the resource is equal to the marginal cost of providing the resource.\r\nFigure 4:\r\nThe equilibrium position and the effect of road charges\r\nThe graph is labelled with â₠¬Å"level of traffic” on the x-axis and â€Å" customaryised cost of drive” (this symbolizes that the generalised costs are time and money spent on making the journey) on the y-axis. The first line drawn in was the demand curve (D), which is also the marginal benefit (MB) curve, (which is a straight line). The easiest way to describe its negative slope is as the number of people using the road increases, the marginal driver will have a lower benefit from the road than the previous one. There are two costs curves to be added to the diagram.\r\nThe private marginal costs (PMC) are the direct costs to the driver. The PMC curve is also the supply curve (S). It is an up(a) sloping curve because with low traffic densities, the only cost to the driver is petrol. However as levels of traffic increase, congestion increases, and thus the driver incurs time costs as well. The social marginal costs (SMC) has the aforementioned(prenominal) base as the PMC (i.e. petrol costs) but as traffic increases, not only does it represent the time cost to that one particular driver, there is also the time costs that each driver imposes on every other driver.\r\nAs is to be expected, at the moment, drivers act according to their PMC curve and the level of traffic on the road increases to the point (Xo), where the PMC is equal to the MB. Thus as the economic theory states, we are at a level of traffic above the social optimum, because the social optimum occurs when the SMC is equal to the MB. This is shown at the point X*, which is the social optimum and the optimal level of traffic. To get the level of traffic reduced from Xo to X*, we have to impose an extra charge or tax â€Å"P” (= P*-Po). This is referred to as the Pigouvian tax measure. This amount (P) forces the road user to take into forecast the costs of the externality that they are generating, and thus induces them to lick at the efficient level.\r\nSince this â€Å"tax” is a congestion charge , it should only be imposed where congestion arises, and the level of charge should be directly related to the amount of congestion. Therefore the inner cities (i.e. urban areas) and motorways, having high levels of traffic, should have higher charges than areas with low levels of traffic.\r\nTraffic imposes a cost on society over and above the PMC. To give the socially optimal solution, these costs should be passed on to the driver. In doing this, only those drivers who were willing to pay society for the externalities they cause would use the road network. Thus levels of traffic would fall to the optimal output level, reducing congestion and pollution in the desired areas of urban areas and the motorways.\r\nIt could be argued that if drivers were charged for the delays and road congestion they impose on one another, some of them would arrange to travel at different times, by different means e.g. rail and bus, or arrange to use different routes where road use charges can be avoid ed completely. There are various technological methods of charging for road uses.\r\nThe simplest method is purchase a indorse to enter a regularize at certain times. The license, like a tax disc, would be prominently displayed with traffic wardens policing the system. However this would mean that only people parked in these zones would get checked; it would not include people besides driving through them. To do this, traffic wardens would someway have to physically stop cars and charge them for take hold of into the area. To set this up in the UK would be very difficult with our complicated network of motorways, urban and rural roads and actually stopping cars would cause more congestion rather than reducing it.\r\nAnother method that uses the new technology of electronic tolls/beacons, no longer requires motorists to halt at tolbooths. As motorists drive erstwhile(prenominal) these tollbooths, the toll registers the electronic number plate and sends a signal to a recording calculator. This is a very direct way to charge the amount specific to the road and to the time of day with the amount due being deducted from their bank account. However, this would infringe on concealment rights, as it would enable people to derive individuals locations. because the use of smartcards would be more preferable like the method used in Hong Kong. The driver inserts a prepaid card, like a telephone card, into the electronic number plate and payments are debited from it when a tollbooth is passed. Only in a case where the card runs out of credit do the central computer monitors start charging directly for road use.\r\nThe installation of electronic technology would have the drawbacks of being time consuming and very dear(p). Not only is there the social system of tollbooths, the installation of smartcards on every single car, but maintenance as well. A type of auspices system would also be needed to restrain free riders1, for example they could remove the smartc ard or goldbrick with it. A method of overcoming this would be the use of cameras on each booth to capture an image of the license plate if a smart card was not detected.\r\nThe most technical method, and therefore probably the most expensive, would be satellite car tracking technology. This uses animate Global Positioning System (GPS) satellites to track vehicles via electronic black boxes fixed to the dashboard of all vehicles. The problems associated with using satellites are similar to that of the above; that is the infringement on privacy rights and costs of setup and maintenance. However one possibility with this method is that it can also be used in conjunction with locating stolen cars.\r\nFrom a technical point of view smartcards seem to be the most sensible option. Although it would be more costly than just buying licenses, this method would lead to less congestion, as there is no stopping to enter the areas being charged. It is less expensive than using satellites and w ould not infringe on privacy rights. However there are difficulties and limitations with implementing any of these road use charging methods; the general public will have to be ameliorate in the use of them, which will be quite complicated due to different regions and the specific times of the day having varying charges.\r\nThe aim of this report was to lose it the argument that as elsewhere in the world, road charges should be introduced in the UK, both for motorways and for urban areas. On addressing the argument the environmental and the consequential factors of congestion needed to be considered. On considering the environmental factors the conclusion is that the reduction in pollution levels would only occur if the road charges reduced private road use and change magnitude the use for public transport (i.e. there were no alternative routes that people had switched to avoid the charges).\r\nHowever a reduction in congestion on motorways and urban areas could certainly improv e a firms economic profit as the investigation into consequences of congestion revealed. Having decided the explicit need for charges with the economic principles supporting this, whether the application of schemes is technically possible became important. For this factor the smartcard road-charging scheme emerged as the top hat option. On bringing all these points together road charges are both necessary and feasible for UK motorways and urban areas. Except by environmental perspectives where additionally there have to be few alternative routes, thus preventing people congesting other roads and avoid payment.\r\n'