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Environment (Deep End)

Apart from London, road charging schemes in this country haven’t made much headway. Fuel duty is high enough as it is without burdening the motorist with an additional layer of expense.

In the US, fuel duties are much lower – and so, with the authorities desperate for cash for maintenance, road charging is under serious consideration. As Evan Halper reports for the Los Angeles Times, sophisticated electronic systems would be used rather than toll booths:

“…America’s road planners… are beginning to see a solution in a little black box that fits neatly by the dashboard of your car.

“The devices, which track every mile a motorist drives and transmit that information to bureaucrats, are at the center of a controversial attempt in Washington and state planning offices to overhaul the outdated system for funding America’s major roads.”

These plans have stirred up a growing controversy, though one with some interesting alliances on each side. In opposition to the move, the rightwing populists of the Tea Party are united with the leftwing activists of the American Civil Liberties Union (ACLU). There’s an unlikely left-right mix on the other side too:

“Libertarians have joined environmental groups in lobbying to allow government to use the little boxes to keep track of the miles you drive, and possibly where you drive them — then use the information to draw up a tax bill.”

It’s obvious where the environmentalists are coming from, but why would libertarians be in favour of road charging?

“The free marketeers at the Reason Foundation are also fond of having drivers pay per mile.

“‘This is not just a tax going into a black hole,’ said Adrian Moore, vice president of policy at Reason. ‘People are paying more directly into what they are getting.’”

This makes sense. As Adam Smith recognised more than two hundred years ago, there are some public goods that only the state can provide. The road network is one of the most important examples. However, that doesn’t necessarily mean that it has to be paid for out of general taxation. Indeed, charging users directly for a state-provided service is entirely consistent with a libertarian approach. After all, that’s how  consumers pay for commercially-provided services.

Of course, the libertarian argument for road charging does need to address the potential threat to privacy:

“In Nevada, where about 50 volunteers’ cars were equipped with the devices not long ago, drivers were uneasy about the government being able to monitor their every move…

As the trial got underway, the ACLU of Nevada warned on its website: ‘It would be fairly easy to turn these devices into full-fledged tracking devices…. There is no need to build an enormous, unwieldy technological infrastructure that will inevitably be expanded to keep records of individuals’ everyday comings and goings.’”

Nevada and other states are now looking for a technology that would allow the charging authorities to “keep track of how many miles a car is being driven, but not exactly where and at what time.”

On the other hand, the ability to take into account exactly where and when we use our cars could be one of the big advantages of road charging. Fuel duty makes no distinction between a motorist adding to the congestion on an important urban artery at rush hour and someone driving down a deserted country lane at midnight. Flexible road pricing, however, would provide a market-based response to congestion and other transport problems. Furthermore it would allow for local experimentation and competition. The localities that found the fairest and most efficient way of pricing their road space would gain an advantage over those only interested in soaking the motorist.

Finally, by replacing fuel duties with road charging, a much clearer picture would emerge of the underlying price of fuel – not only between different suppliers, but between different countries too.

61 comments for: Fuel duty or road charging: which is the least worst option?

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