Thursday, October 25, 2007

Policies for Motorway Congestion

Congestion in the UK is a serious problem. see: Economics of congestion
The fundamental problem is that demand for road use has increased faster than than the supply.

Demand has been increasing for various reasons:
  • Increased economic growth - more demand for transport
  • Increased car ownership - demand for cars is income elastic. (as income rises, there is a bigger % increased in demand for cars)
  • Rising population.
  • Increased cost of traveling by bus and train.
Congestion is costing the UK economy billions of pounds in lost output and wasted costs. Yet, the government is struggling to deal with the problem, because often the solutions are politically undesirable.

Policies to Overcome Congestion on Motorways

  1. Electronic Road pricing - a new tax to make people pay the true social cost. Efficient from an economic point of view, but, politically unpopular. See: electronic road pricing
  2. Build More Roads - Expensive, but does tackle problem of shortage of supply. However, in some areas there is not space to build new roads. There is also a significant external cost of damage to the environment. Critics also argue that building more roads just encourages more traffic and merely delays the problem
  3. Use Hard Shoulder. - In a pilot scheme the Highway's Agency has experimented with using the hard shoulder on the M42 during peak hours. This is a relatively cheap way of increasing road capacity, but there are concerns it compromises road safety because it is more difficult for emergency vehicles to access accidents.
  4. Invest in Alternatives - To get people off the motorways there needs to be an alternative to traveling by car. In recent years, subsidies to train companies have fallen. The cost of train travel has increased faster than car use. Arguably the government should invest in increasing the capacity of long distance rail travel and subsidise tickets to reduce their cost.
  5. Permits to drive - A radical solution would be to limit the number of cars per household, or even to limit the number of motorway journeys. These policies are not being taken seriously at the moment.

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