New report: Efficient pricing of means of transportation in urban areas

On behalf of the Norwegian Public Roads Administration and the other transport agencies, Vista Analyse has assessed effective pricing of transport capacity across modes of transport. The report is part of the transport agencies' work to fulfil the priority assignment given to the agencies in connection with the National Transport Plan 2025-2036.

We find that the introduction of congestion pricing, which internalises the external costs associated with queues and congestion, will result in higher quality transport services and a more efficient utilisation of existing infrastructure and capacity in public transport. In addition, significant savings are achieved by postponing investments in increased capacity. The transport agencies should investigate congestion pricing as an independent alternative to capacity-enhancing measures, which may contribute to highlighting the loss of efficiency associated with a lack of internalisation of congestion and congestion costs.

Congestion pricing means shorter travel times, increased certainty to arrive at the desired time, but also higher travel costs for some. This causes many road users to change their means of transport, changing the timing of their journey. It also leads to some new journeys and some trips not being carried out. Although total traffic and distribution by means of transport and time of travel do not change much, our calculations of effects for selected urban areas nevertheless show that congestion pricing may affect travel time and choice of means of transport for a larger proportion of road users.

We calculate the high road user benefits associated with congestion pricing, and the higher the benefits, the greater the congestion and congestion problems in the first place. The impacts also depend largely on how good public transport services are in the first place. A good public transport service increases the estimated benefit because road users have choices.

Congestion pricing has distributional effects other than queues and congestion. When price is used as an instrument, long passenger journeys are prioritised at the expense of short passenger journeys, heavy transport over light vehicles, and journeys to, from and in work rather than leisure trips. An important reason for this is that the reduction in travel time and uncertainty is greater for road users who have to go through the entire stretch of congestion than road users who only use a small part of the route. Higher valuation of time savings is also part of the explanation.

In connection with this work, we have further developed Vista Analyse's modelling tool, Ada, with the aim of handling road users' choice between travel time/departures when travel time is uncertain and travel comfort varies between different travel times. Ada also differs from traditional transport models by high temporal resolution and "individual" variations in preferences. With the adjustments made in this project, we have established a tool that is well suited for analysing the consequences of measures aimed at influencing travel times and route choices.

The report is available here. Contact Tor Homleid if you have any questions.