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Letter from Stockholm: Goodbye, for Now, to a Successful Traffic Congestion Tax
Alan AtKisson, 4 Aug 06

stockholm.jpg Here in this country of nature-lovers, berry-pickers, and climate-change activist weathermen, you would think that the introduction of a modest toll imposed on cars driving into the capitol city -- enacted with the intention of reducing rush-hour traffic, improving air quality and health, increasing use of public transportation and multiple other benefits -- would experience political smooth sailing. Especially after a similar initiative in London has worked beautifully, while charging more than twice the proposed toll at rush hour.

Not so. Or at least, not at first.

Last year, the politics around the planned "congestion tax/environmental fee" got so heated that Stockholm's normally calm radio channels began to sound more like America's whiniest call-in shows. Friendships strained under the divide between the "Ja" and "Nej" side of the equation, and many commentators predicted that Stockholm's currently left-leaning city government would experience a crushing defeat on the strength of its support for this issue.

There were even open calls for civil disobedience from car-owner support groups, who made it possible for members to purchase special license-plate "protectors," plastic covers that would foil the cameras designed to snap a picture of your car's license plate and ding you for the toll.

All that is behind us now. Because the toll works. And the people like it.

And it has been discontinued.

Discontinuing the toll was actually the plan all along. The backstory of why that was (as I understand it) goes like this: the original idea was promoted by the Swedish Green Party, which meant that it was automatically opposed (or at least, less than enthusiastically supported) by nearly everyone else. Unfortunately, Green support is often the political kiss of death here, even for ideas that everyone agrees are quite good. The political compromise that got the idea through (it was actually forced on the city by the national parliament, not the city council) involved framing it as an experiment, the "Stockholm Trial" in official talk. Stockholm would try it for seven months, and look at the data, and then the people of Stockholm would vote about whether to turn the system back on, or dismantle it.

And that's where we are now. The toll system, which worked nearly flawlessly since being inaugurated on 1 January, was turned off on 31 July.

The very next day, traffic jams reappeared on the major arteries that had, magically, been free of such jams for the previous half-year.

Here are some of the early results from the Stockholm Trial, which involved a tax of between US $1.50 and 2.75 or so per car, depending on time of day and prevailing exchange rate:

1. The Trial reduced traffic even more than expected. Planners expected 10-15% reduction, and they got about 22% -- nearly a quarter, on average.

2. Mobility improved significantly. The data showed this, and everyone talked about it: it was a lot easier to get around, and you could more reliably predict that you would arrive at your destination on time.

3. Carbon dioxide emissions were reduced 2-3% overall in Stockholm County, just as a result of this one policy. Reductions were around 14% in the inner city, compared to pre-toll levels.

4. Particulates, NOx, and other noxious pollutants were also (rather obviously) reduced, and science-based cost-benefit calculations show the policy would save a number of people from early death with this policy -- in fact, it would save about 300 cumulative life-years. Probably about 25 people were spared the agony of a traffic injury, as well, just during the short period of the trial.

5. Public transport use increased by about 6% (but about 1.5% of that is credited to higher fuel prices during this period). And we got new buses.

6. At the start of the trial, 55% of Stockholmers thought the trial was a "bad decision." That number fell to 41% after just a few months, as people experienced the effects directly, and the number calling it a "good decision" of course rose. Even those whose travel habits forced them to pay the toll showed an increase in approval for it.

With all this positive news about a working strategy, one might assume that the political battle is over, and that the referendum will be a kind of formality. Au contraire. Already the local scribes are beginning to write fascinating things, such as (according to my wife's paraphrase translation of a recent lead news editorial), "Yes, it's all very well that the thing worked as planned and made life significantly better ... but since the political process that originally introduced it was flawed, we should reject it now." Such arcane reasoning is being countered by comely columnists in the free daily papers who say (in a typical example) that they will vote yes "for the environment, for myself, for my daughter."

The vote is 17 September. I will be watching it like a hawk, because if even highly educated Swedes -- living in green-city Stockholm, in a country with a whole Ministry for Sustainable Development and a national policy of becoming fossil-fuel free by 2020 -- won't vote "Ja" for a demonstrably effective policy that has obviously improved their quality of life ... well, we will all have go back to the sustainability strategy whiteboard.

I should add that the Stockholm Trial was not just a new toll, but included also an increase in the region's already-excellent public transportation options, including even a significant reduction in price for single trips. You can get the whole story, in the form of a detailed evaluation report, in English.

Oh, and did I confess yet that I never once paid the new toll? I avoided it completely ... by driving an ethanol-fueled car (and commuting by bus). Environmentally-certified cars are exempt. We get our license tags photographed like everyone else when we pass the payment stations around the city -- big brother is watching your driving habits -- but the computers just ignore us. Partly as a result of this intentional loophole, sales of cars like mine have increased dramatically in Stockholm.

Congestion pricing is, by the way, one of the first dozen "Policies to Change the World" selected for promotion by the newly formed World Future Council. Maybe it's time your city tried this policy, too. Just don't bother with the turning-it-off part.

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Comments

Here's a good way to make this work better:

You give everybody a $X tax credit each year.

You increase the congestion fee to a significant amount.

So for example, if you have a $500 tax credit, and the congestion fee costs you $8 or $14 each time, your choice is clear: You can pocket the money and find other ways to get around or drive less, or you can spend your tax credit on paying congestion fees.

You have a carrot and a stick instead of just a stick (well, you'd think that the better air quality and reduced traffic would be a good enough carrot on its own, but it's a bit too indirect for most people). People's attraction to money is working in your favor instead of against you. You can even frame the referendum as "Do you want a tax credit or not?".

Thoughts? Anybody can think of a way to improve further on that model?


Posted by: Michael G. Richard on 4 Aug 06

Tåk so mycket, Alan, for a very interesting and well-written report. I have a question that that I hope won't sound too picky. Congratulations for purchasing an ethanol-fueled car. As you note, sales of such cars rose after the congestion toll. But isn't this ultimately a loophole? What if all the cars convert to alternative fuels? Won't congestion return? Would the air be appreciably cleaner?

I like Michael Richard's suggestion, but perhaps instead of a general tax credit, there could be a transportation voucher of perhaps €500, to be spent on the congestion fee or public transport?


Posted by: David Foley on 5 Aug 06

J aime bien voir le genre de formalite


Posted by: labed on 5 Aug 06

Hi David,

"I like Michael Richard's suggestion, but perhaps instead of a general tax credit, there could be a transportation voucher of perhaps €500, to be spent on the congestion fee or public transport?"

I think it wouldn't work nearly as well as money.

If it can only be used on transportation, you give people a choice between their cars and public transportation; that's the same choice they had before, and you almost encourage them to take their car because you give them a voucher for the congestion fee.

With a tax credit, people feel it's their money, and they don't want to spend their money on fees. But a transportation voucher is useless for other things than transportation, so they won't mind spending it on fees and it doesn't make public transit all that more attractive (it's not making public transit free that makes people take it, it's making cars inconvenient and expensive).

IMHO


Posted by: Michael G. Richard on 5 Aug 06

Has there ever been any evidence to show that this kind of taxation has any impact on the amount of driving people do? Wouldn't this kind of tax just make people angrier while they're doing it?


Posted by: Dean on 6 Aug 06

Dean, RTFA:
1. The Trial reduced traffic even more than expected. Planners expected 10-15% reduction, and they got about 22% -- nearly a quarter, on average.


Posted by: Ben Wendt on 6 Aug 06

By most accounts it is considered a big success in London too, and I was recently reading that it is being used or considered in many smaller cities all around the globe.


Posted by: Michael G. Richard on 6 Aug 06

Dave.

"But isn't this ultimately a loophole? What if all the cars convert to alternative fuels? Won't congestion return? Would the air be appreciably cleaner?"

If everyone bought "Environmentally-certified cars" than they could just repeal the exemption when eco friendly cars reached a critical mass. I think that would definitely have to put that clause in writing before hand, otherwise people might get pretty upset if they just took away that privelege without letting any one know.


Posted by: Jason Sahler on 6 Aug 06

Already-excellent public transportation options?
Are you kidding me? The only public transport option that actually works in Stockholm are the busses...
The underground has had severe problems over the years and the less said about our Pendeltåg the better...


Posted by: Lars Lundstedt on 7 Aug 06

Michael, I think you're right. Thanks for the explanation.

Jason, that's an excellent suggestion.

Lars, perhaps "excellent" is a relative term. Having travelled in Sweden, including Stockholm, I would rate your public transit system as "very good" compared to most U.S. cities, although not quite as good as some other cities in Europe. If you spend some time in the U.S., I think you'll feel grateful when you return home.


Posted by: David Foley on 7 Aug 06

What happens in Stockholm sounds encoruaging.

I wonder if this can be replicated in North America, where inner city is often at a disadvantage competing with suburbs in terms of convenience to automobiles. If it gets any more expensive and difficult to drive to the city center then it already is, people simply head to the many alternatives in the suburb. Instead of traffic congestion in the city we get sprawls everywhere. Everyone travels longer distance and transit is lot less practical.

It is probably easier for people to kick the habit when cheap oil is no long available.


Posted by: Wai Yip Tung on 7 Aug 06

Did the reduction in the cost of using public transport stop also at the end of the experiment? If so, how do you distinguish between the congestion tax detering drivers and the reduced cost of public transport attracting drivers?


Posted by: Matthew Lock on 7 Aug 06

I'm very surprised that Sweden felt the need to experiment with this, given that there is already the excellent example of it working well in London.


Posted by: David Cantrell on 8 Aug 06

For some insight as to if this would work in North America, what amount the toll would have to be, and what people will actually pay for fuel, go to www.EnergyPredicament.com and try the Gas Price Calculator.
The Gas Price Calculator, on the basis of numbers you choose for yourself, calculates how much you will pay for gas for the convenience, time savings, and comfort of your own vehicle.
People who have tried the Calculator are surprised at how much it indicates they will pay for gas, with many results in the range of tens of dollars per litre or gallon.
You can also put in a "toll" to see how it changes the conclusions; my guess is that in North America the toll would have to be a lot higher than Stockholm to have a significant effect.


Posted by: Randy Park on 8 Aug 06

Thank you Alan, top-notch report/commentary.

to Michael Richard "if you have a $500 tax credit"
This is exactly the structure of the Puget Sound trials.

also to M.R. "Anybody can think of a way to improve further on that model?"
Yes. Read http://www.appliedlocation.com/downloads/TheFutureofWirelessParking.pdf

to jason Sahler "loophole? What if all the cars convert to alternative fuels? Won't congestion return?"
Absolutely, this kind of exemption will gradually dissappear, as you suggest, but is a good idea at first.

What is overall interesting about this blog entry and comments is that it is largely pro-toll or at least pro-doing-something about this. in mid 2003 after LCC started, this was decidedly not the case. The paradigm thinking has started to shift. Look up the "RAC report" I am presenting new paper re "gaining acceptance for road pricing" for EU transport conference for Sep 2006. Send me an email and I will send you a copy. There is hope.


Posted by: Bern Grush on 11 Aug 06



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