Courtesy of Heath G at Catallaxy I learned of this interesting proposal to levy congestion-dependent charges to access the bus lane on Sydney’s Harbour Bridge. Motorists would be charged $5, $10 or $20 to escape congested lanes and travel on uncongested lanes into the city. They would be charged more as levels of congestion rose and more people sought to use the lanes.
I doubt introducing this facility would do that much for congestion since only one lane of traffic is involved but I still think it is a good idea. People with a high value of travel (the rich and those running late with an urgent need to visit the city) are effectively bribing, via the public purse, other motorists to get to the front of the queue. The trade yields efficiency gains since every motorist is potentially advantaged – those using the lane get to the city quicker while those not using the lane get given a transfer via the public purse.
For dealing with congestion I would turn this arrangement on its head. I would alternatively price all access roads to the city (not just roads across the bridge) except for a few roads or, on multi-lane roads, except for a few lanes, which would be left unpriced. Then motorists would be given a choice of getting to the city without excessive congestion but paying a fee or travelling under congested conditions and not paying a fee.
This arrangement overcomes a major practical objection to road pricing that it is politically unacceptable. As Harrington et al. (1998) show the political acceptability of road pricing increases if you give motorists choices of this type. With reasonable charges most motorists would use the priced roads and lanes leaving the unpriced roads and lanes congested but not unreasonably so.
Sydney is one of the most beautiful cities in the world. Vancouver, San Francisco and Stockholm would be among its rivals. As an ex Sydney-sider I regret the way life in Sydney is becoming dominated by congested car journeys. This detracts from the superb amenity values and agglomeration economies of living in such a beautiful city. Practical ways need to be found to limit low-value journeys into the city and a mixed system of tolled and un-tolled roads is one way to go.