Empirical evidence of the impact of early urban charging schemes comes from London (TfL Annual Monitoring Report, 2006) Singapore (Holland and Watson, 1982) and Norway (Larsen, 1988).

A Singapore Area Licence Scheme

Context

Singapore introduced an Area Licensing Scheme in 1975 to reduce congestion in the city centre. Drivers had to purchase licences for a day or a month to allow them to enter the defined area between 0730 and 1015. The initial charge was S$3; this was raised to S$4 in 1976. Vehicles with four or more occupants were exempt. Police at the 22 entry points observed vehicles and recorded those without licences; they were then fined. Subsequent modifications involved extensions to the evening peak, the working day and Saturdays, to a set of charging points on expressways, and to all cars however many occupants they had. Different charges were levied for different types of vehicle. A major study was conducted in 1975 (Holland and Watson, 1978); the evidence below comes from this.

Impacts on demand

Surprisingly there were very few changes in evening peak travel; it appeared that people continued to use their cars to leave the city centre in the evening peak, even though they had made changes in the morning.

Impacts on supply

Only minor adjustments were made to the road network, and no delays were caused at the entry points. However, drivers did need to spend time purchasing licences. It should be noted that whilst overall supply of road space has not changed, because each vehicle on the road impacts upon the supply available to all other vehicles, the supply of road space and therefore "quality of service" for each vehicle is greatly improved.

Contribution to objectives

Objective	Scale of contribution	Comment
		The reduction of 44% of traffic entering the centre resulted in an increase in speeds of 22% in the centre and 10% on the approaches. Speeds fell by up to 20% on the inner ring road. No comprehensive cost-benefit analysis was conducted, but it is clear that there were substantial reductions in congestion costs and increases in benefits. It is possible that charges were, in practice, too high and that greater benefits could have been obtained by a smaller reduction in car-use.
		The scheme’s impact was primarily on the commercial and business centre of the city. Residential streets were therefore little affected, but there was an improvement in conditions in shopping streets and the business district.
		This was not a key objective and no attempt was made to assess impacts. However, it can be expected that it was improved in the city centre in the morning peak, with some minor deterioration outside the controlled periods and on the inner ring road.
		The study attempted to identify gainers and losers, but found little evidence of differential impacts, and suggested that the range of alternatives offered reduced the scale of any inequities. A subsequent study, however, suggested that poorer car-drivers had been adversely affected (Wilson, 1988).
		This was not a key objective and no attempt was made to assess impacts. However, it can be expected that it was improved in the city centre in the morning peak, with some minor deterioration outside the controlled periods and on the inner ring road.
	?	An attempt was made ten years later to identify impacts on the urban economy and business relocation. None were found; they had been dwarfed by the expansion of Singapore’s economic base. Businesses were very supportive of the scheme.
		In 1975 prices costs were approximately S£60M, the operating costs S£1m PA, and revenues approximately S£7M PA. Although revenue-raising was never an objective, the scheme raised substantial net revenues; operating costs being only 12% of revenues.

	= Weakest possible positive contribution,		= strongest possible positive contribution
	= Weakest possible negative contribution		= strongest possible negative contribution

= No contribution

Singapore Electronic Road Pricing

Context

In 1998 the Area Licensing Scheme was replaced by an Electronic Road Pricing Scheme. 97% of the 700,000 vehicles in Singapore were fitted with on board units, in which smart cards were inserted. Gantries at the Area Licensing Scheme entry points and expressway charging points were equipped to identify, interrogate, charge and, if necessary for enforcement, photograph, all vehicles passing. Charges are now levied per crossing rather than per day, and vary by time of day and vehicle type. Charges are revised quarterly to maintain speeds at between 20 km/h and 30 km/h in the city centre, and 45 km/h and 60 km/h on expressways. As a result charges are lower than with the Area Licensing Scheme for much of the day and have been waived on Saturdays. Early results are now available (Menon, 2000).

Impacts on demand

Impacts on supply

Capacity has been maintained, and the delays involved in purchasing licences removed.

Contribution to objectives

Objective	Scale of contribution (change from previous charging system)	Likely scale of contribution if implemented from situation with no congestion charge in place	Comment
			No detailed analysis has been conducted but it seems probable that, by targeting charge levels to achieve optimal speeds, efficiency has increased.
			As with area licensing, there was little impact on residential streets
			This was not a key objective. There will have been some limited further reduction in environmental impact through the further reduction in traffic
			No assessment of equity impacts has been made, but those making occasional journeys off-peak and on Saturdays will have benefited, while costs will have increased for those making multiple journeys.
			This was not a key objective. There will have been a limited further reduction in accidents through the further reduction in traffic.
	?	?	It seems very unlikely that there will have been significant impacts on the urban economy.
			The cost of introducing electronic road pricing was substantial, at S£200M. Revenues are, in practice, lower than with area licensing, at S£8M PA, but revenue generation is not an objective.

	= Weakest possible positive contribution,		= strongest possible positive contribution
	= Weakest possible negative contribution		= strongest possible negative contribution

= No contribution

Toll rings in Bergen, Oslo and Trondheim

Context

In 1986 Bergen, Norway's second largest city, was the first city in Europe to introduce a toll ring (or cordon) charging system. It was introduced with the objective of raising the finances required to accelerate the implementation of a wide-ranging programme of transport investment. The system charges all vehicles (other than buses in regular service) a flat fee for entering the city's central business district and operates between 6AM and 10PM Monday-Friday. Toll rings were subsequently also introduced in Oslo and Trondheim. As in Bergen, the main objective is to raise revenue so charges are set according to revenue goals, though both Oslo and Trondheim use electronic toll collection and in Trondheim tolls are differenciated by time of day.

Impact on demand

Impact on supply

The toll rings themselves have not affected overall supply, though the finance they have generated has enabled a series of major transport projects to be implemented. It should be noted that whilst overall supply of road space has not changed, because each vehicle on the road impacts upon the supply available to all other vehicles, the supply of road space and therefore "quality of service" for each vehicle is greatly improved.

Contribution to objectives

Objective	Scale of contribution	Comment
		No detailed analysis has been conducted but it seems probable that, in Trondheim at least, efficiency will have been increased via the targeting of the charge on peak period traffic.
		The schemes are focused on the central business districts. Residential streets are therefore likely to have been little affected, though there may have been an improvement in conditions in the central shopping streets.
		This was not a key objective. There is likely to have been some reduction in environmental impact through the reduction of traffic.
		No assessment of equity impacts has been made, but those making occasional journeys outside the charging periods, eg on Saturdays, will have benefited while costs will have been imposed on those travelling during the charging periods, eg during the peak periods in Trondheim. Opinion polls originally indicated that approximately two thirds of Bergen’s population were against the toll ring, though it has now been widely accepted by the majority. The change in opinion is thought to be connected with the visible improvements in the local transport network benefiting everyone and is despite relatively high levels of tax on motoring.
		This was not a key objective. There may have been a limited reduction in accidents through the deterance of car travel, though this is likely to have been offset by increase in road capacity.
		In Bergen, Saturday was deliberately kept free from tolls in order to support the city’s shops. However, the effect on city centre shopping is not known. The reduction in congestion is likely to have boosted productivity which may have impacted on economic growth.
		In Bergen the initial investment to establish the ring was approximately NOK 15M (€1.85 million). Annual income has been higher than expected and is approximately NOK 70M (€8.645 million). Of this, NOK 50M is spent on roads, NOK 14M is taken up in operating costs and NOK 7M is stored in a fund (the use of which attracts great political debate).

	= Weakest possible positive contribution,		= strongest possible positive contribution
	= Weakest possible negative contribution		= strongest possible negative contribution

= No contribution

For more information see www.brotunnel.no

Value Pricing in San Diego

Financial and technical support from the US Federal Highways Administration (FHWA) has been used to facilitate the implementation of three pricing projects which have come to be known as 'value pricing' schemes. In addition, the FHWA has supported a comprehensive study of an additional, privately operated pricing project.

The first of the three value pricing projects was implemented in 1996 along the 13km high-occupancy vehicle (HOV) section of Interstate 15 (I15) in San Diego. Access to the HOV lane was extended to include a limited number of solo drivers who were able to pay for a monthly pass for use of the HOV lane during peak periods. The number of available passes rose gradually from 500 to 900 over the first year and the cost of the pass rose from $50 to $70. Then, in March 1998, the pricing scheme was upgraded to become an automated, dynamic system. Congestion in the HOV lane is monitered and forms the basis of the toll levels. Tolls are set with the aim of maintaining 'free-flow' conditions in the HOV lane and range between $0.50 and $4. They vary as often as every 6 minutes and the current toll level is displayed on a real-time sign post in advance of the entry to the lane. Tolls are deducted using transponders and over-head readers A similar scheme has since been introduced in Houston, Texas. In addition, higher peak fees on existing toll roads and bridges have been introduced in Lee County.

Impacts on demand

Impacts on supply

By freeing up the spare capacity in the HOV lane for use by non-HOV users, the I15 value pricing scheme has, in effect, increased the overall capacity of the road. In addition, the revenues it has generated have provided funding for a new express bus service along the corridor.

Contribution to objectives

Objective	Scale of contribution	Comment
		Conversion of the HOV lanes to HOT has used up spare capacity in that lane so improving efficiency in the short-term. Revenue has paid for a bus service which may also have improved efficiency. Redistribution of trips to either side of the peak also improves efficiency. There has not been any apparent reduction in car-sharing. Cost benefit analysis over a 20 year period showed the scheme to be a success.
		Not in an area where people live or work but the peak spreading observed may have reduced liveability in such areas that are origins and destinations connected by I15.
	?	Reduced congestion in the short-term but perhaps in the longer term less incentive to car share and so higher traffic levels. Overall traffic levels almost certainly increased and so CO2 emissions likely to be higher. But the scheme did fund an express bus service.
		No evidence presented but it is likely to be the more wealthy that pay the charge for the HOT lane, the revenue raised has then been used to fund an express bus service which may benefit the socially excluded.
		No evidence presented but better distribution of traffic either side of the peak may have reduced accidents but on the other hand increased overall volumes may have led to an increase.
		No evidence presented but likely to be beneficial.
		The scheme provided revenues which under state law had to be used to fund transport improvements along the corridor. The net financial impact is therefore neutral.

	= Weakest possible positive contribution,		= strongest possible positive contribution
	= Weakest possible negative contribution		= strongest possible negative contribution

= No contribution

Congestion charging in London

Unless it is stated otherwise material in this case study is taken from the Central London Congestion Charging, Fourth impacts monitoring report, June 2006 available at http://www.tfl.gov.uk/tfl/cclondon/pdfs/Fourth-Annual-Report-Overview.pdf

Context
The London congestion charge was implemented in February 2003. The key elements of the scheme as it was originally set up are set out below:

• Scheme operates on weekdays between 7 a.m. and 6:30 p.m. in the area of Central London, as shown in the map.
• Cars, vans and lorries charged £5 to operate within the zone.
• Exemptions include motorcycles, licensed taxis, vehicles used by disabled people, some alternative fuel vehicles, buses and emergency vehicles.
• Area residents receive a 90% discount for their vehicles.
• Payments can be made on the Internet, at payment booths in the area, with text messages and at retail outlets displaying the congestion charge logo such as newsagents.
• Cameras automatically check the number plates of eligible vehicles driving into and within the zone. The numbers are automatically checked against a database of vehicles that have paid the charge. If the charge has been paid the number is deleted from the database (avoiding privacy issues) with only those vehicles that have not been paid for having the details stored. If the vehicle has still not been paid for by 2400 that day then a fine of £80 is issued. This is reduced to £40 if paid within two weeks.

In July 2005 the basic daily charge increased to £8.

Congestion Charging Zone and Residents Discount Area

Congestion charging signs at the edge of the zone (left), public telephone with Internet payment (middle), cameras within the zone (right)

Impacts on demand

The charge has had a dramatic impact on travel demand in the capital. The following is reported in TfL's monitoring study:

• Vehicle kilometres (vehicles with four or more wheels) in the charging zone during charging hours were reported to have dropped by 15% in the first year whilst the number of vehicles entering the charging zone during charging hours was down by 18%. These levels of traffic reduction have been largely sustained in the fist three years of implementation. Both of these outcomes were towards the top end of the range of TfL's predictions.
• The increase from £5 to £8 resulted in further a reduction of around 4% in traffic entering the charging zone.
• Small increases in traffic observed on the inner ring road which forms the boundary of the charging zone.
• Outside of the charging zone more generally there was no significant evidence of an increase in traffic as a result of the scheme.
• Congestion in the zone during the charging period dropped in the first year by approximately 30%. Subsequently there has been some dilution of this impact.
• Total number of trips into the area have been relatively unaffected with car users transferring to London Underground, buses, trains, cycling, powered two wheelers, taxis and walking.
• Numbers of pedal cycles entering the zone during charging hours have increased by around 25%.

Traffic entering the charging zone during charging hours

Key changes in traffic entering the charging zone during charging hours. Annualised weekdays for 2002 (pre-charging), 2003, 2004 and spring 2005 (charging at £5) and autumn 2005 (charging at £8)

The fact that drivers paying the charge can drive all day at no extra charge leads to the possibility that those vehicles (and those that are exempt) may take advantage of the less congested conditions by increasing their mileage within the zone. The table below indicates that this has not been a significant problem with vehicle kilometres (vehicles with four wheels or more) within the zone showing the same percentage reduction as numbers entering the zone shown in the table above.

Year-on-year percentage change in vehicle kilometres driven within the charging zone during charging hours, annualised weekdays for 2002, 2003, 2004 and 2005

The figures below illustrate that the charge has not caused a major displacement of traffic to the times of day either side of the charging hours. Furthermore, after an initial "spikiness" that is evident in 2004, traffic distribution throughout the day is settling down to take a shape very similar to that before the charge.

Traffic entering the charging zone by time of day. Annualised weekdays for 2002 (pre-charging), and 2003, 2004 and 2005 (post charging), all vehicles

Traffic leaving the charging zone by time of day. Annualised weekdays for 2002 (pre-charging), and 2003, 2004 and 2005 (post charging), all vehicles

Impacts on supply

• Reduced congestion improved bus performance dramatically with excess waiting times falling by 30% in the first year and a further 18% in the second year.
• Further improvements in the quality of the bus service were achieved through the increased investment in preparation for and post implementation of the charge. TfL has identified £20 million per annum extra spending on buses associated with the scheme.
• Reduced congestion improved journey times and fuel costs for cars and goods vehicles.
• Taxis benefited from reduced congestion with increased speed and reduced cost to passengers.
• Measures have been implemented to improve the "Level of service" for walking and cycling.
• Measures to improve priority for bus services, walking and cycling have led to a small reduction in capacity for private vehicles.

There is no evidence of a negative impact on business performance and the majority of businesses now support the scheme which was not the case prior to its implementation.

Other Impacts

Accidents

The table below shows significant drops in accidents in the charging zone and inner ring road. Part of this reduction can be attributed to the congestion charge itself but the majority is likely to be due to other other safety initiatives, some of which have been made possible by the congestion charge. That part of the reduction in accidents can be attributed to factors other than the congestion charge is clear from the reductions in accidents for the rest of London.

Total reported personal injury road traffic accidents by area, 2001 to 2004

Monetarised Costs and benefits

Summary of principal annual operating costs and road user benefits (£ millions, 2005 prices and values, charge at £5)

Research by other authors has questioned TfL's conclusions. Prud’homme and Bocajero (2005) conclude that the charge is an economic failure. However, other commentators (Mackie, 2005; Raux, 2005) have taken issue with some of the detail of their assessment.

Contribution to objectives

Objective	Scale of contribution	Comment
		The significant reductions in congestion with transfer to more sustainable modes represents a major increase in economic efficiency. Operating costs are high however and do reduce the net economic benefit of the scheme. Total benefits are £200 million per annum with total costs including extra buses at £110 million. This gives a net annual benefit of £90 million. TfL figures are not universally accepted however, particularly regarding the values of time used, and so there is still some degree of uncertainty over the efficiency case.
		There is strong evidence that the reduced levels of traffic and the increased space and priority for pedestrians and cyclists represent a significant improvement in amenity in the zone. Major increases in traffic diverting around the zone have not been an issue.
		Reductions in vehicle traffic and congestion have reduced emissions of CO2 by 15.7% in the zone and 8.5% on the inner ring road. Local pollutants in the zone were down by 13% and 16% for NOx and PM10 respectively; whilst both pollutants were down by 7% on the inner ring road.
		No evidence presented on equity and social inclusion directly but the improvement in public transport and bus services in particular, improved amenity for walking and cycling and reduced accidents are all likely to disproportionately benefit the socially excluded.
		Between 60 (2.8%) and 140 (-6.5%) fewer accidents are estimated to occur in the zone and inner ring road as a result of the scheme. The savings have been given a monetary value of £15 million per annum.
		The overall conclusion is that the impact on London’s economy has been neutral.
		Projected net revenues for the financial year 2005/2006 are £122 million. This figure can be expected to improve in the following financial year with the full revenue effects of increased charge.

	= Weakest possible positive contribution,		= strongest possible positive contribution
	= Weakest possible negative contribution		= strongest possible negative contribution

= No contribution

Case study: Western Extension of London Congestion Charging Scheme

Further details on the extension scheme can be found in TfL's report to the Mayor on the proposed western extension: http://www.tfl.gov.uk/tfl/cc-ex/tfl-report.shtml

Context

Following the political and operational success of the London congestion charge implemented in 2003 an extension of the zone is planned for 2007. The charge throughout the area will be £8, and residents throughout the extended area will all benefit from the 90% rebate. Two critical through routes will remain free of charge. On implementation of the extended zone charging hours in the whole charging area (existing and extended) will end at 6 p.m. The figure below shows the extended congestion charging zone.

The extended central London congestion charging zone

Impacts on demand and supply

Transport for London have conducted modelling work using the London Travel Survey model to project the impacts of the western extension the results are summarised in the table below.

Traffic entering Western zone before and after introduction of an £8 charge 7 a.m. to 6 p.m.

Note: figures have been rounded.

The table below summarises projected changes in traffic as a result of the implementation of the western extension. The increase in traffic in the central zone is likely to be primarily due to residents of the extended zone being eligible for a discount in the original central zone. A smaller increase is likely to be as a result of traffic that terminates in the western extension zone no longer diverting around the central zone to avoid the charge.

Summary of LTS Model Projections (including ranges of projected changes)

Other Impacts

Business Impacts

The table below shows the anticipated potential business impacts for the western extension zone.

Potential aggregate impact of the western extension by business sector, 6 p.m. finish to charging

Economic impacts

The tables below show the projected economic impacts of the western extension. The low sensitivity refers to a low behavioural response to the new charging regime.

Estimated traffic and transport benefits of a western extension £ million per year: 6 p.m. finish to charging

Western Extension, 6 p.m. finish to charging. Undiscounted and discounted (3.5%) costs, revenues and benefits

Cost-Benefit Implications of the Proposed Western Extension

Contribution to objectives

Objective	Scale of contribution	Comment
		The reduced congestion in the extended zone that is projected is expected to reduce journey times for car and bus users therefore representing an efficiency improvement. Overall projected benefit cost ratio for the proposed 6 p.m. finish is 0.80 to 1.15 over a 10-year period.
		The projected reductions in traffic levels in the extended zone can be expected to improve liveability. The implementation of the scheme will also allow improved priority for walking and cycling.
		The projected reductions in traffic levels in the extended zone are expected to lead to small reductions in emissions of greenhouse gases and local pollutants. It is suggested that reduced exposure to particulates could delay one or two deaths a year and delay or prevent two to four Hospital admissions a year in inner London.
		No evidence presented on equity and social inclusion but improved public transport and greater priority for walking and cycling are likely to benefit the socially excluded.
		With less traffic a reduction in accidents is likely. TfL projects a reduction in accidents of 80 to 150 accidents per year. This projection incorporates an increase of 10 to 20 accidents per year in the central zone due to the increase in traffic.
		The extension is predicted to have a neutral effect on most economic activities, but some negative effects on shops, hotels and restaurants.
		With the proposed 6 p.m. finish to the charging hours projected discounted net revenue is £-4 million to +£130 million over a 10-year period. This includes the cost of additional bus services at £11 to £16 million per year.

Demonstration projects

A number of demonstration projects throughout Europe have been undertaken in recent years, the results of which are summarised below.

The Leicester Environmental Road Tolling Scheme (LERTS) involved monitoring the use of a small scale electronic tolling scheme by 100 volunteers who were given money which they could either use to pay the toll or which they could save by using the alternative services provided (park and ride and bus priority). Interim results indicate:

• Patronage on the park and ride service grew from 1300 to 3150 passengers per week, illustrating a latent demand for the service even in the absence of the toll scheme;
  
• Journey time savings for bus of 25% (24 to 18 minutes);
  
• Journey time savings for cars of 3% (14.5 to 14 minutes);
  
• Transfer from car to park and ride amongst commuters during the tolling period ranged between 16% and 32%, with transfer to bus and to ride-sharing each in the range 1-4%;
  
• 31.9% of people made no change;
  
• 25.2% changed route;
  
• 12.8% changed departure time;
  
• 14.9% used park and ride;
  
• 2.1% used other Bus;

The Stuttgart 'MobilPass' field trial involved 350 users in a test of different pricing strategies using an electronic fee collection system. Simulations using the MobilPass data have shown that, in principle, corridor tolls on peri-urban roads accessing Stuttgart will result in greater transport and emission reductions than a cordon toll does. This is because, in the case of a cordon, the toll paid includes any subsequent trips made within the cordon, where as in a corridor the effect of pricing schemes will be noticed directly.


The Athens cordon pricing experiment, undertaken as part of the TRANSPRICE project, involved two groups of 50 selected users, each made up of current car users who commute to central Athens from northern Athens suburbs. The users were allocated a nominal budget and presented with a choice of either driving to central Athens in their car, as before, but having to use their budget to pay to cross a cordon or switching to a metro-based park and ride service with the opportunity to save their budget. The results indicate:

• 65% of users made no change;
  
• 24.0% of users switched to the park and ride service;
  
• 5.5% of users switched to other public transport;
  
• 5.5% of users switched to other modes (e.g. ride sharing, taxi).

The Bristol ELGAR demonstration project, undertaken as part of the CONCERT project, involved an electronic road pricing scheme whereby 116 volunteers could be rewarded for switching to modes other than private car for their journey into the city centre, a package of public transport improvements and a series of variable message signs giving information on pollution levels. Findings indicate that

• The majority of users continued to use their car as before;
  
• 15.1% of journeys switched from private cars to other modes (though it was found that most of the reduction resulted from a few of the participants switching nearly all of their trips from private car);
  
• over half of the respondents to the follow-up questionnaire thought that the revenue from any future road pricing scheme should be spent on improving public transport; and
  
• three-quarters of those switching to public transport expressed a positive opinion about this experience.

A major new field trial was operational in Stockholm from January to July 2006. Its results will be included in KonSULT once a decision has been made on its future.

Gaps and weaknesses

The London congestion charge with its detailed monitoring studies has done a great deal to improve our understanding of how such a scheme is likely to work in a major western city. No other scheme has been monitored as thoroughly as in London. However, the scheme implemented in London is a fairly simple and imperfect and so caution should be taken when applying the lessons from the London scheme to other types of scheme. Whilst the London scheme is generally considered to have been a success it is far too early to draw any definitive conclusions on the long-term economic impact. Economic impacts are particularly unclear in centres that face competition from other conurbations in terms of shopping trips and job locations.