57. Reading the text in question

The RAND Corporation recently produced a study dealing with two concepts of interest to drivers and moral theologians: Congestion pricing for highway access and the equity (or lack of it) for different categories of drivers when congestion pricing is implemented.The equity of congestion pricing is discussed in a paper written by Liisa Ecola and Thomas Light. Their paper, which is relatively brief, can be downloaded here.

I won't reprint their paper with my commentary (too long for this setting), but a close reading of the paper's "executive summary" may be of use.

From my experience with elected officials and other decisions makers, it's these summaries that are only part of a report read by non-specialists. Summaries such as this one are the only part of a technical discussion that appears in the general news media.

I've edited the summary's key paragraphs (I hope fairly). My notes and comments are in brackets [ ] and in bold face.

. . . Once relegated to academic discussions, congestion pricing can now be more easily implemented thanks to technologies that make it possible to charge motorists as they drive. [This is typically done by issuing transponders to drivers who create and maintain an on-line account automatically debited each time the vehicle passes a sensor along the toll lane. Tolls charges can be changed by time of day or because of traffic conditions. The technology, however, is not well suited to undocumented drivers, drivers without regular bank accounts, those with no access to web-based tools, and those who are reluctant to use the web for commerce. "Technological inequity" could result for them.]

. . . Since congestion pricing imposes a cost on something that was previously free-access to roadways during peak driving times-critics often suggest that it will harm those with lower incomes. . . [See for example, the views of Los Angeles Times columnist Tim Rutten here and here.]

On the other hand, supporters [Here, here, and here] argue that congestion pricing can be more equitable than the current U.S. system for managing the use of roads and funding transportation improvements. [Funding transportation improvements is a separate issue from managing the use of roads, and combining the two issues may distort how issues of equity are seen.]

First, congestion pricing means that those who contribute most to congestion will be required to pay more. [All categories of drivers are included in those who "contribute more" to congestion, and all drivers contribute equally to congestion when they are on the road. Only those who commute by public transit contribute less (although they contribute some). Making all drivers who use toll lanes pay more for the convenience cannot resolve the question of equity between categories of drivers "? some who can easily pay and some who can't pay to use toll lanes.]

Second, existing transportation fees and taxes, such as the motor-fuel tax, are often regressive, meaning that low-income drivers pay a higher proportion of their income toward them than wealthier drivers do. If broadly adopted, congestion pricing revenues could be used to oï¬?set or reduce other regressive fees and taxes. [A hopeful speculation. The MTA has suggested a form of assistance to low-income drivers. Vouchers or credits to use public transit would give low-income drivers some measure of equity with the wealthy drivers who would use toll lanes to improve their driving experience. But this only works for those low-income divers who can use public transit to meet their transportation needs. And it is debatable if vouchers for public transit is a "like for like" restoration of equity.]

Finally, some argue that congestion pricing can reduce air pollution, which is, in many cases, a serious problem in low-income neighborhoods located near major freeways and arterials . . . [This is an argument made by many supporters of congestion pricing. Later in the RAND paper, Ecola and Light conclude: "While congestion pricing has been shown to reduce emissions in general, there is scant evidence showing that congestion pricing can speci?cally reduce negative environmental consequences for neighborhoods disproportionately aï¬?ected by emissions."]

. . . and promote better management of the roadway network, thus avoiding costly capacity investments. [Again, the question is not that congstion pricing schemes can regulate access or reduce construction outlays, but what degree of equity among categories of drivers will the scheme preserve. ]

This report examines the equity issues associated with congestion pricing. We used published work . . . (from) two strands of literature: economic and planning. [Ecola and Light should not be faulted for limiting their study to the domains of economics and planning. But I suggest that questions of equity "? which are finally questions of morality "? are not within the competence of these domains to judge fully.]

[Edit]

When congestion pricing is evaluated, it may fare well under some notions of equity but poorly under others. This issue is not easily resolved. For example, since those who contribute to congestion pay to drive during congested hours, congestion pricing fares well on the cost principle. On the other hand, if people in the same income group pay widely di�erent amounts in congestion tolls because of where they live or work, congestion pricing does not fare well in terms of the horizontal-equity principle. While these aspects of equity can be stated precisely, calling one policy or set of outcomes more equitable than another requires that one impose some preferences on the way in which bene?ts and costs are allocated within society. [So elastic are these approaches to a complex issue, so hazy are the boundaries of equity as described, and so easily are preferential attitudes made into axioms, that is difficult for me to discern if any public policy based on the Ecola and Light paper would be equitable. ]

[Edit]

For all these reasons, we argue that there is no single answer to the question, "Is congestion pricing equitable?" The answer depends on how we measure equity and define groups, the specifics of the location, and to what we compare congestion pricing. Since it is not generally possible to consider all the numerous facets of equity, it is important for a region considering congestion pricing to select the most relevant criteria for assessing equity given local conditions and concerns. [The terms of equity are so broadly drawn here that the mere selection of the criteria would predetermine the outcome of any public policy analysis.]

[Edit]

First, depending on how congestion pricing is implemented, it can be either regressive or progressive. This depends in large part on how toll revenues are used. For instance, if regions spend revenues in ways that benefit low-income individuals, congestion pricing is more likely to be progressive. However, if regions use revenues in a way that benefits all individuals equally, congestion pricing may be, overall, regressive. This is the strongest finding in the economic literature. [Apart from a voucher or credit system for some categories of drivers to encourage their use of public transit "? itself a policy of questionable equity "? the MTA plans to use the revenues from toll lanes to build and improve more toll lanes. Since this benefits all drivers who use them, toll lanes would be, according to Ecola and Light, at least somewhat regressive.]

Second, even when low-income and other transportation-disadvantaged groups benefit as a whole from congestion pricing, it is very likely that some individuals will still be worse off. These include people with no choice but to drive on congested routes with pricing in effect and those who may have to forgo important trips because they are too expensive. However, many of these same people are also disadvantaged by the current transportation system, and assessments of equity should take this into consideration. [Disadvantages that can be measured in money and time for one category of drivers and advantages that are measured by other metrics of value need to be weighed carefully, lest prejudice about the benefits for "disadvantaged groups" blind decision makers to the benefits (or harm) to individuals in that category.]

Third, for all forms of congestion pricing (but more for some than for others), the distribution of residents and job opportunities (not to mention shopping, schools, places of worship, and other important destinations) has a large impact on the equity implications . . .[Again, the terms on which equity are to be decided are too vague to assist decision makers when issues of equity are raised.]

Fourth, high-occupancy toll (HOT) lanes, the most common form of congestion pricing in the United States, tend to raise fewer equity concerns among motorists, since they provide drivers with an additional choice of using a set of priced lanes while allowing them to continue using parallel, free lanes if they prefer. While high-income drivers use HOT lanes more often than other drivers, there is little evidence that low-income drivers are made worse off. [Whose evidence, gathered by what means, interpreted though which assumptions? And is the mere fact of choice, often cited by proponents of congestion pricing, sufficient to establish equity for different categories of drivers?

However, the equity implications of HOT lanes are affected by the location of residents, the costs of participation, and the way in which revenues are utilized. [An honest conclusion about the high degree of variability in impacts, but decision makers are left with little more than a "coin toss" for determining which option offers the greatest degree of equity.]

Some analysts have raised concerns that, if HOT lane revenues are used to expand the road network, they will harm the environment and equity by inducing more traffic growth and sprawl. [Inevitably, the spectre of unintended consequences.]

Fifth, while congestion pricing has been shown to reduce emissions in general, there is scant evidence showing that congestion pricing can specifically reduce negative environmental consequences for neighborhoods disproportionately affected by emissions. [As noted above.]

Finally . . . there was very little work on the long-term land-use impacts of congestion pricing, the equity implications of building new roads with congestion pricing revenue, and how adding congestion pricing to existing transportation-finance mechanisms (as opposed to replacing them) would change the equity implications overall . . . [Good reasons for recognizing and avoiding the band-wagon effect when considering congestion pricing schemes from the perspective of equity to all categories of drivers.]

Given the risk of negative impacts to low-income and other groups under congestion pricing, we looked at suggested ways to diminish these impacts. Two mechanisms are in common use: (1) revenue redistribution . . . [That is, a subsidy for low-income drivers to use toll lanes.]

. . . and (2) discounts and exemptions. Revenues from congestion pricing can be redistributed through public works-for example, increasing transit service to create better options not to drive. [Again, are bus passes "like for like" when evaluating the equity of congestion pricing?]

. . . Researchers have also proposed a number of ways to redistribute revenues on an individual basis, through credit-based systems and tax credits. As none of these credit-based proposals has been implemented, it is difficult to judge their effectiveness. [Again, a good reason for recognizing and avoiding a band-wagon effect.]

The other main way to lessen the burden of congestion pricing is through discounts and exemptions. . . . However, the trade-off is a higher number of unpaid or discounted trips, which will reduce incentives that seek to discourage driving on congested roads. [Cost alone is a weak disincentive for well-to-do drivers. If the purpose of toll lanes is the removal of drivers from roads though the disincentive of cost alone, then what category of driver is most likely to be affected? ]

. . . Since equity is so specific to individual regions, those responsible for developing a congestion pricing proposal should test it through modeling to determine who tends to pay charges and whether low-income or other transportation-disadvantaged groups are disproportionately affected. [Has the MTA concluded this study? What are the results of this modeling?]

They should also conduct sufficient outreach that residents understand the proposal and have opportunities to offer suggestions. [Public participation is not a substitute for careful analysis and is too often used, in my experience, as cover for a predetermined policy.]

Finally, equity should be monitored after congestion pricing is implemented, and the system changed periodically if the initial tools to promote equitable outcomes are not meeting their goals. It would be useful to develop an "equity audit tool" to simplify this process. [Apparently, no such review mechanism currently exists.]

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