McGill prof: We need smart tolls on our bridges

Posted on Monday, April 20, 2015
Christopher Ragan, economics professor and Chair of Canada’s Ecofiscal Commission. / Photo: Owen Egan

Christopher Ragan, economics professor and Chair of Canada’s Ecofiscal Commission. / Photo: Owen Egan

By Doug Sweet

Montreal, like other cities, needs to consider “congestion pricing” – putting a price on traffic congestion the way provinces should be putting a price on carbon, says Economics Professor Christopher Ragan, Chair of Canada’s Ecofiscal Commission, a McGill-based think-tank developing practical policies to improve economic performance and the environment.

Fresh from the publication of a new report on how provinces should be responsible for carbon pricing, Ragan says the commission will soon prepare a report on the need for cities, particularly big ones, to tackle the “massive costs” associated with traffic congestion, including wasted time and wasted resources.

Tolls on bridges and major highways are part of that equation.

For the moment, the Ecofiscal Commission’s recommendation that the provinces be responsible for carbon pricing, backed by commentary pieces in The Gazette and La Presse earlier this month, has captured the media’s attention. Most of Canada’s premiers gathered in Quebec City Tuesday to discuss climate change, a day after Ontario joined Quebec’s cap-and-trade carbon-pricing endeavour (along with the State of California). Though they failed to reach a consensus on carbon-pricing, Ragan said Quebec’s cap-and-trade system will pay significant dividends.

“Our focus on this report was on carbon pricing, because we think there’s an urgent need to get carbon prices in place across the country and we think provincial action is the best way to do that,” Ragan said in an interview. “So our focus in the report is on why climate change is an urgent issue and why carbon pricing is a good solution, and why carbon pricing by the provinces is a very good and practical solution.

“My guess is that five to seven years from now we’ll look back and say, ‘Aha! This really did the job. It reduced emissions and it did so in a cost-effective way.’ And I think a lot of Quebecers don’t know that.

“Quebec has a system in place that is approximately as good as B.C.’s much-celebrated carbon tax,” Ragan said. “Different system, it’s a little bit more complicated to operate, but it is a well-designed system.”

Ragan notes that cities like Montreal may not have much of a role to play in establishing carbon prices, but they can work with the provinces to ensure policies work in tandem to advance growth and address environmental issues.

“I think that carbon pricing probably isn’t a thing to be done by cities; it’s probably best handled by the provinces as a whole. But here’s another thing congestion pricing can do; it can actually reduce the extent to which there is a drive toward urban sprawl.

“When people think about sustainable cities of the future, they think about increasing density in the urban core. And you think about policy that would actually tilt things in favour of reducing sprawl and actually increasing the density of the city. And congestion pricing would be one thing that could do that,” he said.

“But cities can also play a role in terms of building standards, for housing and other buildings, which I think can play a very significant role. Building codes that improve the efficiency of the building, that improve the heating and the cooling – those are actually quite well done by cities, in conjunction with provinces. And that can play a big role in terms of reducing greenhouse gases.

“Those things can be very complementary to a provincial carbon-pricing system. They can work in tandem with carbon pricing; in fact some of them would be driven by carbon pricing. You start attaching a price to carbon emissions and you’re creating a clear financial incentive to actually make those buildings more efficient.”

Ragan said it is important for different levels of government to work together to make their policies complement one another.

“What you need is to have governments talking about this with each other. So, the provincial government can sit down with its cities and say ‘we’ll do this and you guys do that, that and that and we’ll make it all fit together,’ ” he said.

Back to congestion pricing.

“The problem is that people have basically free and unlimited access to driving on roads, and when they do, especially during peak hours, they impose costs on other people in terms of time – and so the result is that people spend massive amounts of time (in aggregate it’s a massive cost) spent white-knuckling it on a highway or a freeway, or city roads for that matter – time spent away from either pleasant activities or work activities or both.

“The latest technology (already in use on the Hwy. 25 bridge between Montreal and Laval) actually allows you to attach a price that is a function of or depends upon the busy-ness of the road. So an empty road at 2 in the morning may have no price attached to it, where exactly the same road at 6 p.m. may have a significant price attached to it. And you’re typically talking here about major arteries, not minor roads. And a toll on the Champlain Bridge, a toll on any bridge for that matter, is playing basically the same role. The toll could be a function of the time of day, so you actually reduce congestion during peak times.”

The debate about resource extraction will continue, Ragan says, noting that it’s important for Quebecers to understand that the province’s cap-and-trade system is a winner, and an important factor in the debate.

Ragan hopes the absolutism that often characterizes the resource-extraction debate can be tempered.

“I think to some extent, perhaps even to a large extent, Quebec’s ability to continue the development of its resources is going to lie in the perception that the people have about how effective Quebec has been in terms of protecting the environment.

“I think the more Quebecers come to know that they’ve got a very good cap-and-trade system in place, the more they would be prepared to accept that some of this development is OK, so long as it is done well,” Ragan said. “I think resource development is a pretty obvious thing – if you’ve got tremendous wealth underneath the ground, it’s kind of crazy to think that you shouldn’t develop it. But you’ve got to develop it in a way that really is mindful of the environmental challenges.

“There’s just got to be some sensible middle ground. And I think the middle ground, frankly, is exactly what the Ecofiscal Commission is all about. It is about promoting economic prosperity, but it’s also about doing it in a way that is very mindful of the environmental challenges. And there is a way to do this. There absolutely is a way to do it and it’s called Ecofiscal.”

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4 Responses to McGill prof: We need smart tolls on our bridges

  1. ken haggerty says:

    The BC direct tax system has been demonstrated to be visible, and apparently quite effective. The cap and trade system appears to be another bureaucratic boondoggle with possible potential to be effective, but so far as I am aware a ruined by meddling with a dismal track record. Not unlike communism, a beautiful idea if not for people!

    I would love to see a solid reference that supports the effectiveness of this solution.

  2. Wayne Wood says:

    This makes good sense. There is one local example – the new A25 bridge to Laval has one rate for rush hour and a cheaper rate for the rest of the time.

  3. Andrew Dej says:

    How will you prevent the ‘cap and trade’ system to become another bureaucratic boondoggle opening a wide door to lobbying/corruption (in the awarding of the carbon credits), fraud (in the measurement and reporting of CO2 emissions) and market manipulation by speculators, diverting consumers hard earned money to carbon hedge funds instead of being used to finance carbon alternatives and cleaning up the environment? Show me where such a scheme has been working efficiently to reduce CO2 emissions for a representative length of time. At best, it will just become another cost of doing business passed on to consumers, with a lot of the carbon payments going to profit middlemen. At least a direct carbon tax would be simpler to administer, less prone to corruption while being revenue neutral or providing seed money to the development of carbon alternatives.

  4. R Troy says:

    NYC badly needs this. The recent partial shutdown of Penn Station led officials to decrease night time tolls on Hudson River bridges for trucks – and it worked well, reducing daytime truck traffic to help compensate for increased car and bus traffic while Amtrak repairs went on at Penn for 8 weeks. Commuter railroads like LIRR (Long Island) offered temporary lower fares to those who switched to the subway outside of Manhattan and even gave some free subway transfers. Despite the large loss of train capacity at Penn, LIRR trains that did run to Penn instead of alternative stations had their best (real time) on-time record in a long time. Now there are proposals to maintain these lower fares to encourage some people to not go to Penn – which in some cases makes sense anyway, and to have tools – congestion price based, on all Manhattan crossings instead of a few. It’s much easier now with new cashless toll systems that read either your EZ Pass or your license plate. The governor supports it, the Mayor hates it (even though he wouldn’t have to pay, maybe his friends would). Sam Schwartz, aka Gridlock Sam, proposed this years ago. BTW, the revenue would be dedicated to (besides crossings maintenance) to mass transit needs – hopefully not providing an excuse to cut back city or state contribution levels to mass transit, given that NYC Transit Authority, Long Island Rail Road, Metro North Railroad all desperately need $billions in long deferred repairs and improvements (including PTC / CBTC and new cars).

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