A Congestion Charge for Downtown Toronto: An Analysis

English: Toronto Downtown Core, at nite from CN Tower. Español: El centro de Toronto visto de noche. Français : Le centre-ville de Toronto, vu de nuit. (Photo credit: Wikipedia)

Revenue Options Study: Cordon Congestion Charges (185 page pdf, KPMG for City of Toronto, Jun. 2016)

Also discussed here: Report lays out hundreds of millions in potential new tax dollars for Toronto (Jeff Gray, Toronto Globe and Mail, Jun. 21, 2016)

Today we review a report by KPMG for the City of Toronto in which the option of a morning rush hour congestion charge is considered in the Toronto downtown south of the 401 between Bathurst and Bayview. Another road pricing option:applying a toll on the Don Valley Expressway is not included in this study and is being considered separately. A daily charge of $5 to $20 at each cordon would yield up to $377M/year in net revenue with 33% overhead. This in turn would cost the average household in Toronto $120 /year with 35% of the revenue coming from visitors.

The overall conclusion: “In general, a cordon charge would have a positive impact by reducing traffic, decreasing greenhouse gas emissions and increasing transit ridership.” and “The net revenue from cordon charges should have a high degree of stability in the long-term.” Implementation costs for congestion charges are high enough to consider as well the option of increasing parking rates in the downtown which would bring in similar revenues (and this seems to be favoured by the Mayor).


 Key Quotes:

Assumptions:

“The cordon charge will be applied only upon entry into the cordon zone between the hours of 6:00 am and 10:00 am on weekdays.”

"An electronic tolling system similar to the Highway 407 ETR will be used, which combines a transponder and licence plate recognition system. “

“The tolling of highways by the City is permitted under COTA; however, the highway or portion of road being designated as a toll road must first be approved by the Province. … COTA may need to be amended for Toronto to have the required authorities.”

 “It may be possible for the City to contract with the owners of Highway 407ETR (407 ETR Concession Company Ltd.) to operate and administer the City’s cordon charge program.

• An annual commuting cost of $3,954 was used for price elasticity calculations.
• There are 49 entry points into the cordon, based on the City of Toronto 2011 cordon analysis.
• A price elasticity of -0.3 was used and compares similarly to London and Singapore’s elasticity.

“The net revenue from cordon charges ($377M/yr with a $20 cordon charge) should have a high degree of stability in the long-term.”

“While a cordon charge has many attractive features… similar benefits may be achieved at lower implementation cost by applying a levy to commercial parking spaces in the downtown core. “

“Parking space levy: Other cities, including Vancouver, Los Angeles, Miami, Pittsburgh and Seattle, tax either parking spots or parking revenues. Current legislation would only allow Toronto to levy a per-spot tax on landowners. A $1-a-day per-spot tax could bring in $383-million a year, according to KPMG’s estimates”

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• What are the Characteristics of Traffic Congestion?
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How Does the Cost of Urban Sprawl Compare Internationally?

Sprawl Tax: How the US stacks up internationally ( Joe Cortright, City Commentary, Jun.7, 2016)

Also discussed here: Transportation Costs and the Spatial Organization of Economic Activity (Abstract, Stephen J. Redding, Matthew A. Turner, National Bureau of Economic Research, Jun. 2014)

Today we review a comparison of the costs of sprawl in terms of extra transportation costs for commuting and added time in traffic. Results show that the average daily commute time in the US and Canada is well above (50-62 minutes) that of 17 countries in Europe. As a percent of household income transportation costs are highest for the US at 18% (or $1,500/household )followed by Austria, Canada and Portugal at 15-16% and an average of 12.8% overall (where the higher fuel prices in Europe are countered by the longer commute trips in the US and Canada).  

Key Quotes:

“the average American household spent approximately 18 percent of its budget on transportation. Among the other 16 countries, none spent more than 16 percent, and the average spending level was just 12.8 percent. That means a typical US household spent about five percentage points more of its income on transportation than the residents of other developed countries—which translates to about $1,500 every year.”

“The average American worker spent about 51 minutes commuting between home and work and back again—more than all but one other country in the sample. That exception was Canada, where the typical worker spent 63 minutes on their commute—but the rest were lower, all the way down to Portugal, where roundtrip commutes took up just 29 minutes per worker per day. For the other 15 nations examined the average commute time was 39 minutes—about 12 minutes less per day than in the US.”

 “Compared to other high income nations, we spend about $1,500 per household on transportation costs and about $770 per worker more on commute time costs.”

Related articles

• What are the Characteristics of Traffic Congestion?
• Are Traffic Congestion Costs Exaggerated?

What are the Overall Benefits of Road Pricing beyond Revenue Generation and Congestion Management?

Next Generations of Road Pricing: Social Welfare Enhancing (15 page pdf, Omid M. Rouhani, Sustainability, Mar.11, 2016)

Today we review a paper that looks beyond the two factors often used to justify road pricing: raising cash and reducing traffic congestion. Some of those factors are public acceptability, equity and the fact that only 26% of the important factors are generic- much depends on local factors that differ from one location to another – which perhaps explains why congestion pricing (and carbon taxes for that matter) are overwhelmingly accepted in places such as Stockholm and British Columbia but vigorously rejected by the public in many US and Canadian cities.

Some of the implementation decisions involve the spillover of traffic from a tolled road to its neighbours (which supports the notion of tolling existing roads and not just new ones) and then need for alternatives to road use (i.e. walking, cycling, public transit) for those who need to travel and the need for flexibility in terms of the rate to be charged and finally the need to make clear at the onset the overall benefits or welfare to the travelling public.

   

Key Quotes:

“the actual adoption of RPs has been very limited … Several barriers constrain their implementation. The most important is politics. A strong and devoted political champion is required for such new policies. Politicians are often not willing to risk their election prospects for a system where success is not guaranteed.”

“Two major goals drive the road pricing decision: revenue generation and congestion management.…other objectives are pursued as well, including transportation-related emissions reduction .. public transportation use or mode shift encouragement .. land use management .. and social welfare maximization”

 “time-based pricing provides the greatest social benefits, followed by distance-based, congestion (zonal) pricing, and cordon pricing.”

“only 26 percent of factors affecting implementation of RPs are generic, and that dominant factors are those factors, such as public acceptability.. and equity .. that result from particular features of the case study. This is the major reason why various models are required for predicting the outcomes of a scheme both before and after its implementation”

 “To support a more sustainable and welfare-enhancing transportation system, RP schemes should be implemented where high quality travel alternatives such as public transportation, biking lanes, walking facilities, ridesharing and other services are available”

“Tolls on few roads, especially with unlimited (high) profit-maximizing rates, could increase total travel costs for a transportation system as a whole because of spillover effects to un-tolled sections .. suggests creating and applying congestion pricing on existing roads, not only on (limited) new facilities.”

“The important factors:

• take profits from road pricing into account, contrary to economists’ approach
• examine the impacts of pricing on transport systems as a whole not only the priced facility or the charge zone
• consider the demand risk (uncertain future demand) in the analysis, using a scenario analysis
• include the disutility resulting from travel discomfort of road pricing
• improve public transport systems to provide/encourage an environmentally-friendly alternative to driving
• provide the vision to users and residents why road pricing increases welfare
• explore equity implications
• offer a flexible, but capped, tolling/pricing system that allows tolls to vary temporally
• include impacts on sectors outside transportation"

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Using Congestion Pricing to Reduce Carbon Emissions

Research on Urban Road Congestion Pricing Strategy Considering Carbon Dioxide Emissions (20 page pdf, Yitian Wang, Zixuan Peng, Keming Wang, Xiaolin Song, Baozhen Yao, and Tao Feng, Sustainability, Aug. 6, 2015)

Today we review research into models of congestion pricing to reduce both traffic congestion and the emissions that are produced by stop and go traffic- something that is not usually considered when planning congestion pricing because of the difficulty in measuring actual road emissions. The fact that road emissions make up 80% of transportation GHG emissions makes this assessment very important when emission reduction, especially in cities, is the goal. Results indicate that achieving both objectives is feasible with emissions falling by 19%, and modal car use falling from 70% to 56% with increased use of public transit.  

Key Quotes:

“traffic congestion affects the efficiency and quality of life, such as lengthening travel time, increasing travel delays and resulting in traffic accidents…. [also]aggravates environmental pollution, such as reducing the use of fuel, increasing energy consumption and increasing pollutant emissions reduction”

 “emissions of motor vehicles are high in cases of stop-and-go traffic and in high-speed situations.”

“congestion pricing strategy has been recognized as one of the most effective countermeasures of traffic demand management (TDM) to mitigate traffic congestion.. can effectively transfer the car users to the public transportation and mitigate traffic congestion”

“In 2008, road emissions accounted for 80% of the total emission in the transportation sector, which has since then increased continuously…carbon dioxide (CO2) emissions on roads in urban centers substantially affect global warming.”

“Comparing the carbon emissions before and after the implementation of congestion pricing..the total carbon emission reduces from 121.22 (ton/h) to 98.31 (ton/h), which falls 18.9%. This is because traffic congestion pricing can increase the total cost by car, transfer the car users to the public transportation and reduce the car traffic flow reduce dramatically”

“The share rate of bus increases from 30.1% to 43.7%, while the share rate of car decreases from 69.9% to 56.3%.”

 ‘the scheme proposed in this paper can mitigate traffic congestion and reduce carbon emissions more effectively than the other two schemes. This is because traffic congestion pricing considering the carbon emissions costs can adjust the structure of urban traffic and thus to create a low carbon city.”

Related articles

• Letter: A Mobility Plan in Los Angeles
• Personal vehicles blamed for traffic
• Why is Vancouver the Greenest City in the world and How is it Planning to Be Better?
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• When to Apply Maximum Charges to Relieve Congestion?
• How Does Milan, Italy Reduce Traffic Congestion and Pollution- and Win an Award for it?
• What are the Costs of Chauffering?
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The Main Question for Urban Planners to Resolve- Sprawl or Densification?

Although an important factor, there is a complex relationship between urban densities and car use. (Photo credit: Wikipedia)

Density: Drivers, Dividends and Debates (32 page pdf, Greg Clark, Emily Moir, Urban Land Institute, Jun. 23, 2015) Also discussed here: Density: Drivers, Dividends and Debates (Catherine Anderson , Urban Land Institute, Jun. 23, 2015) 

 A compact city tends to be more environmentally sustainable and has generally cleaner air than one that is spread out with emphasis on making it easier for people to drive to the centre of town with emphasis on roads wherever it allows them to drive more quickly. Today we review a research paper that examines the meaning(s) of urban density, explores the many myths about sprawl and intensification and suggests better designed and more sustainable cities for the future. Cities are categorized in terms of the density of their urban core, inner city and suburbs as Low-High-Low (typical of Europe), Low-Low-Low (typical of sprawled cities in USA/Canada/Australia), Low-Low-High (Toronto, Oslo), Medium-High- High (developing world cities). High density cities enjoy a number of advantages over low density ones, including walkability, natural habitats and economic waste disposal but fears of lower livability, traffic congestion and noise/pollution in high density cities need to be mitigated. Oslo and Toronto are seen as large cities where the balance is more nearly found. 

Key Quotes:
“54 percent of the world’s population, some 3.9 billion people, live in urbanised areas. By 2050 the urban proportion of the population is projected to grow by 2.5 billion, reaching 66 percent of the total
“ how to deliver successful densification is not so obvious and is one of the most important topics of this urban decade. Good density will mark out the next generation of winning cities”
“The Downtown and Central Waterfront area [of Toronto] is the key area for both residential and commercial development, with close to 40% of approved new developments in the city. … Toronto had more high rise buildings under construction than any other city in North America from 2012 to 2014.”
“The key combination is density with place-making and infrastructure. If you have both you get a really successful city like London. If you have density without place-making you get a different kind of city.”
“Vienna and Paris stand out as higher density cities which perform strongly on the positive benchmarks ….Mexico City on the other hand is a high density city that is the worst performer on both ‘good’ and ‘bad’ density indicators. …. Although less dense overall than the majority of the case study cities, Toronto is particularly successful in minimising the negative effects of density. “
some typologies:

• Low-High-Low cities:are cities which are characterised by high density cores, but much lower density …European cities
• Low-Low-Low cities:are those cities with expansive suburbs and high levels of car dependence, as well as spacious downtown zones. Many North American cities..
• Low-Low-High cities:are those cities which have made conscious efforts to densify particular neighbourhoods or districts…Toronto and Oslo..
• Medium-High-High cities:are both sprawling and dense, with crowded informal housing on the peripheries and particular pockets of very high density, around transit hubs for example… developing world cities..”

“Environmental aspects:

• Energy consumption is reduced in compact cities.
• denser cities are more walkable, and can provide more viable public transport options.
• More compact urban forms have smaller physical footprints, preserving greenfield sites and natural habitats.
• Waste disposal and management services can be more viable and economical to construct and operate at high density”

“liveability concerns (fear of overcrowding, noise and pollution, traffic, lack of green space) .. most important contemporary reasons for resistance to density, ahead of social concerns (crime, segregation) or economic concerns”

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When to Apply Maximum Charges to Relieve Congestion?

A Bathtub Model of Downtown Traffic Congestion ( 8 page pdf, Richard Arnott, ACCESS, University of California, Jun. 10, 2015)

Today we review an analysis of the degree of congestion as a function of the timing of commuting and how applying a congestion charge can alter the flow sufficiently to allow free flowing traffic. This approach is called the bathtub model as it resembles the flow of water through a drain- as the water depth builds up the drainage rate increases up to a critical point when it decreases. In the same way, traffic reaches full congestion and then the flow slows down. Applying higher tolls as the traffic begins to reach the critical point reduces the traffic density and allows the flow to increase again.

   

Key Quotes:

“the dynamics of rush-hour traffic have the same properties as water flowing into and out of a hypothetical bathtub….. The height of water in the tub represents traffic density. The rate at which water drains increases with the height of the water until it reaches a critical height. … corresponds to the density of downtown traffic at which traffic jams start to become common. Above this level, traffic jams become more severe and the exit stream slows.”

"Commuters arriving exactly on time experience no schedule delay but a large travel time cost since they travel when traffic is most congested. In contrast, commuters departing at the beginning of the rush hour experience little congestion and therefore shorter travel times, but they arrive at work considerably before their work start time, experiencing high schedule delay cost.”

“ideal congestion pricing, with its no-toll equilibrium rush-hour traffic dynamics. Equilibriumis achieved when no commuter can reduce her trip price by altering her departure time. The optimum time pattern of departures minimizes total trip costs.“

“These optimal conditions can be achieved by charging a time-varying congestion toll set so that each commuter pays for the external cost her trip imposes on others. Each commuter’s trip price then equals the social cost of her trip. Since commuters respond to the toll by altering their departure times so that the equal trip-price condition (now including the toll) continues to be satisfied, the social cost of each trip is the same, which is the defining feature of the optimum scenario.”

Related articles

• A Guide to Implement Congestion Charging
• Did Congestion Charges Affect Traffic Accidents in London?
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A Guide to Implement Congestion Charging

Introduction to Congestion Charging: A Guide for Practitioners in Developing Cities  (58 page pdf, Dirk Van Amelsfort and Viktoria Swedish, the Asian Development Bank,  2015)

Today we review a comprehensive guide that describes the various steps necessary to develop and then implement a successful congestion charging system, borrowing on examples of established systems in Stockholm, London and Singapore, among others. Although aimed at developing countries, many of the principles and preparations needed are common to the developed world as well – such as, being prepared with responses to eight objections or concerns often made to any such scheme. The underlying objective has to include elements of fairness of application, as well as environmental and economic benefits with as few exemptions to being charged as possible.

Key Quotes:

“When people drive cars, they contribute to road damage, emit harmful pollutants, noise and vibrations and cause delays for others. Considering this, the travel decision of one individual imposes costs on others. In most transport systems the costs imposed on others are not fully paid for by the traveller. Congestion charging is a way to put such costs on drivers. “

“Arguments are that congestion charging (1) is unfair, (2) harms the privacy of citizens, (3) not achieve the intended effects and (4) will damage the economy. “

“The higher the charge, the lower the public acceptability is, and travellers with a higher value-of-time perception have a higher acceptance of congestion charging …Even if a high value of time may correlate with income levels, these two things are not the same.”

“Factors that affect public acceptance:

“Experience: The more experience …the higher the acceptance.

Dislike of government intervention: ..government should intervene as little as possible..

Interest in environmental issues: ..environmental problems are severe and need to be addressed will favour congestion charging more.

Value of time: The higher the perceived value of time.., the higher the acceptance for congestion charging… the more benefit travelers get in return for the paid charge.

Frequency of car use: The more travellers use their cars, the lower the acceptance level.”

“As soon as congestion charging policies become active - assuming all technologies function and the system is appropriately designed - people will find the system more acceptable. In most cases acceptability rises above a 50%.”

“Recommendations:

·         Focus on impacts

·         Do the homework

·         Use models to forecast effects

·         Prepare to respond to concerns

·         Make revenues generated and how the money is spent transparent

·         Invest in alternative travel options

·         Let the functional design drive the technological solution

·         Reduce political risk by building in redundancies that can later be removed

·         Make sure people understand how to use the system

·         Have a solid legal framework”

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