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BITRE | Working paper 74

However, in line with their previous commitment, the introduction of the scheme

will depend on costs not exceeding 5 per cent of revenues. 35 While such a decision

rule reflects an appreciation of the danger of a scheme being uneconomic, the 5 per

cent figure is without economic foundation.

Where there is sufficient revenue to cover operating costs, there may be little to no

interest in determining the economic impact of the scheme. This is not surprising—

fiscal success is much more readily understood than economic success. Further,

there can be many stated aims of congestion charging schemes, against which they

are logically evaluated. However, regardless of the stated aims, a scheme should

ultimately be evaluated in terms of its impact on community welfare—that is, whether

it represents an efficient use of the community’s resources.

The implications of the nature of the aims on the evaluation of a scheme are

considered in the next section.

3.8 Nature of the aims

Diversity

The distinguishing feature of congestion charging around the world is the variety of

aims drawn on for its support. Table 3.1 outlines the range of objectives associated

with different congestion charging schemes.

The stated rationale tends to reflect the discipline and background of those espousing

the aims.

Three principal aims are:

• to internalise each user’s time delay externality

• to use the charge as a demand management tool

• to fund infrastructure provision.

Economists focus on ‘ensuring that road users face the marginal social cost of their

activity’. Essentially, if motorists impose costs on others (such as time delay costs) for

which they are not charged, they will ‘overuse’ the road and generally not operate in

the interests of the wider community. 36

On the other hand, traffic engineers and environmentalists focus more on ‘demand

management’ as the underlying rationale for congestion charging. That is, congestion

charging is seen as a way of more closely aligning road use with what the engineers and

environmentalists judge to be an appropriate use of road space—for the engineers,

one that allows maximum throughput.

35. Another safeguard of the Dutch scheme will be that the payments will be different and not additional to current

motoring costs. This they label the ‘honesty principle’.

36. Conversely, if motorists are over-charged they will under-utilise the road and, again, not be acting in the community

interest.

44

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