Implement Variable Rate Road Pricing

Assumptions

• The revenue and emissions impact of road pricing in the San Francisco Bay Area has the potential to achieve results similar to the central city cordon charge tested in Stockholm.
• Results of an upcoming SFCTA study will yield further information on the potential for road pricing in San Francisco.

Analysis

Variable rate road pricing is a demand management strategy to reduce traffic congestion and encourage transit use. By charging drivers a fee for the use of specific roadways at certain times, the city can reduce the incentive to use the most congested roadways during peak times. Reduced vehicle volumes allow private vehicles and transit to travel faster and more reliably. Revenues can be used to support other transportation improvements. London, Stockholm, and other cities have implemented road pricing programs with some success.

In London, the congestion pricing scheme has generated net revenues of nearly 100 million pounds which have been used to support improvements to public transit, bicycling and the pedestrian realm. Traffic reduced by about thirty percent and traffic speeds increased by about 25%. Measures to capture the “space dividend” from the reduced traffic on behalf of faster buses and safer bicycling and walking have resulted in congestion, again, for private vehicles but not for other, more high performance modes.

These successes suggest that charging for auto access to on the region’s roads may be one way to relieve congestion, reduce emissions, raise revenue, and improve transit.

What we do now
MTC estimates that 43 percent of trips made entirely within the city of San Francisco are made by private auto. For interregional trips with destinations in the city, the share made by private auto is 69 percent. Even for work trips, which tend to occur when roadways are most congested, just over half of trips to and within San Francisco are made by private vehicles. During peak times, most major arterials and downtown streets suffer from significant congestion, resulting in delays and lost productivity for motorists, reduced speed and reliability for Muni passengers, and degraded conditions for pedestrians and cyclists.

What we could do
The SFCTA is currently studying the possibility of road pricing for downtown San Francisco. This study is being funded with a grant from the Federal Highway Administration (FHWA). The study will investigate combinations of pricing, transit improvements, and other projects.

The MTC is also studying the implementation of toll lanes on the region’s highways. High occupancy vehicle lanes would be created or converted to high occupancy vehicle or toll lanes, open to anyone willing to pay a fee to avoid congestion. The fee would be variable to ensure high travel speeds in the high occupancy lanes. SPUR believes that tolls are best applied to entire roadways, not just to dedicated lanes, which should continue to be set aside exclusively for high occupancy vehicles (carpools, vanpools, and buses).

Alternatives could include any of the following fees: cordon charges for entering the downtown area; fees for entering the city on one of the four freeway “gateways” to the city; a reverse direction toll to discourage traffic to the Bay Bridge in the afternoon peak hour, when congestion is worst; tolls on the region’s currently unpriced freeways. Cost
The SFCTA's study is still underway, and the policies that may be implemented in San Francisco are not known at this time. As a result, the potential costs and benefits of the program cannot be accurately estimated. However, variable rate road pricing has been implemented with success in other cities: an examination of the impact of congestion pricing in Stockholm, Sweden can suggest the possible costs and benefits of congestion pricing in San Francisco. With a population of just over 800,000, Stockholm is of comparable size to San Francisco.

In 2006, Stockholm implemented a “cordon toll” for vehicles entering its the entire Stockholm City Centre area. The program was a success, significantly reducing congestion, pollution, and traffic accidents. The program generated a net annual operating surplus of the equivalent of $70 million.²

Evaluators of the Stockholm program found that motorists made a total of $93 million in congestion tax payments. However, they also found that the combined value of shorter and more predictable travel times for motorists and bus riders exceeded the total costs of payments by $730,000 per year. Evaluators estimated the total social benefit—including private costs, public benefits, and climate and health benefits—at $125 million.

Carbon savings potential
The full potential for road pricing in San Francisco is not known at this time. The SFCTA's study in Spring 2009 will provide some information, but more study will be needed to understand the role of road pricing within San Francisco relative to road pricing on the region’s roadways and parking pricing. In any case, it is clear that the most significant peak hour congestion in the Bay Area is on the region’s freeways. Tolling these roads—particularly where there are currently no tolls at all such as on I-280 and US-101 south of San Francisco—could have significant congestion reduction benefits and generate significant revenues for transit improvements.

For the purposes of this analysis, we use the example of Stockholm to suggest the potential of road pricing relative to other means to reduce greenhouse gases. Stockholm’s central city road pricing achieved a 5.4 percent reduction in CO2 emissions citywide, and reduced emissions for the county as a whole by 2 percent. In San Francisco, this represents a savings of 38,000 metric tons of CO2 emissions.

Endnotes
¹ Facts and Results from the Stockholm Trial – Final version – December 2006. Miljöavgiftskansliet/Congestion Charge Secretariat, City of Stockholm. Muriel Beser Hugosson, Ann Sjöberg and Camilla Byström
² Hereafter costs and revenues in Swedish Kronor will be expressed as dollars at today’s exchange rate.