If the government ever gets round to introducing congestion charges on motorists (road-pricing), how high should these charges be? And how high, often unknowingly, are the congestion costs actually incurred by motorists?
Professor David Newbery and his colleagues at Cambridge's Department of Applied Economics, who have carried out research on the issue in Cambridge and York, find that the costs to motorists of using their cars at congested times are much higher than previously thought.
Using traffic data obtained in the two cities, together with an estimated relationship between speed and traffic flow, the research produces figures for congestion costs per car which are relatively high, ranging from 47p to 60p per vehicle per kilometre.
Does this mean that road-pricing should be set at this level? No, because people already pay for car use, mainly the cost of fuel but also depreciation and insurance. Thus, the amount that would need to be charged to create an economically efficient situation is considerably less than the figure for congestion costs. In York, for example, the amount is 21p per kilometre per car, (HGVs are counted as two cars, motorbikes as half a car) while in Cambridge the figures are 35p for the morning peak and 26p in the evening rush hour. The charges, according to the researchers, should only be imposed only in the most congested areas, rather than in the whole town or city.
Road-pricing, it should be stressed, need not add to the overall cost of motoring. Instead, it could replace part of the existing taxes on fuel, being a better targeted method of allocating the costs resulting from vehicle use in congested areas than the crude method of having very high taxation on petrol and diesel.
Professor Newbery and his team are attempting to devise a more sophisticated model for the calculation of these costs, including the key element of the cost each additional vehicle imposes on other road users, and are looking at a further eight to ten towns and cities to identify appropriate levels of road-pricing.
The new work contrasts with the usually-quoted figures for the costs of congestion, which always stretch into billions of pounds a year. Such figures have always been somewhat meaningless, being unsophisticated multiplications of the estimated amount of time lost by people in traffic jams and an assessment of the value per hour, depending on whether it is working or leisure time.
It also provides a more useful template for policy. The implication of earlier, multi-billion pound calculations for congestion costs was that they should be reduced to zero by building substantial additional road capacity, even though this would be prohibitively expensive and environmentally disastrous.