Clarifying the Stockholm Experience

The South Manchester Reporter published an article in October on the Stockholm experiance of congestion charging (here). This was largely based upon the Manchestertolltax.com article.

There were those who doubted the effects of the Stockholm situation. I have written to the South Manchester Reporter the following:

Sir,

 

I would like to clear up a quibble concerning the impact of the Congestion Charge scheme in Stockholm. Andreas Krohn of the Stockholm Chamber of Commerce claimed that traffic volumes were 1% higher, whilst  Manchester City Council Leader Richard Leese claims there was a 20% reduction.

Both are right, as after 6 months traffic volumes were 20% lower, but after 2 years they were 1% higher than before the charge was introduced. A similar pattern occurred in London. The reason is that people view car travel as a luxury. The car is usually quicker and more convenient and more comfortable than public transport (when you include walking and waiting). Over time people will adjust their expenditure to afford that luxury.

In my view, to maintain the targeted reduction in peak time traffic of 15% to 20% would require huge increases in the charging rates from the current £5 maximum. This could be between £10 to £20 per day by 2020. That would be great from the point of revenue to pay for subsidies, but a massive reduction in living standards for those with no alternative but to drive.

 

The rebound effect, of people adjusting their expenditure to a new situation is something not taken into account by the forecast model. Instead it views people as automatons who react in predictable ways to changes in the environment around them. In the short term, statistically this may appear to be true, but in the longer term people adapt. This is a rich country, where most of the population are able to change their expenditure priorities in a response to changes in the environment around them. When new technology comes along many switch at great expense to that technology such as for iPods, DVD Recorders or Nintendo Wii. They also adjust their expenditure and lifestyle to changing conditions, such as finding a partner, making a family, (or to family break-up) or moving to a new job. Yet many of these people who have a large amount of income that can be moved between types of discretionary expenditure, may not find they have much available time. Working families for instance, whether with one parent or two, may value the extra time and flexibility that a car can provide in saving on childcare, moving the children to after-school activities, whilst trying to do a full-time job. Using public transport with its greater unreliability, inflexibility and (usually) greater travel time will cause problems. Even though the Tif package looks at these issues, the result of a congestion charge may significantly lower the living standards of these families, or cause the making of substantial sacrifices to quality of life.

Follow up – The above letter was published in the letters page of the South Manchester Reporter on 6th Nov 2008

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  1. Tram to East Didsbury – a net detriment to Society | ManicBeancounter

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