Wednesday, November 12, 2008

Charging road user fees using GPS

The University of Iowa's Public Policy Center is starting new research that is really exciting for those of us who think road tolls are exciting. The premise is that the Highway Trust Fund, which is financed by the gas tax, is in trouble. People are driving less this year (due to economic factors and the spike in gas prices last spring) so the Trust Fund is strained. Long term, any shift towards more efficient vehicles or alternative power sources will diminish the gas tax revenues further. It is a real conundrum as to how we should pay for our transportation infrastructure in the future.

Charging drivers for the amount of driving they consume is the best way forward, but how to implement and collect user fees is tricky. GPS is promising because it only requires that drivers install a GPS transmitter on their vehicles rather than having their odometers read or toll booths placed. There are many potential benefits from this technology. First, by switching more of the cost of driving to marginal costs per mile forces drivers to paymore out of pocket and will reduce the overall amount of solo driving and potentially total miles driven. Second, the GPS data can be used to guide future investment. For instance, if there are roadways that generate a lot of revenue from miles travelled, then that is a good place to invest in maintenence and perhaps expansion. The current gas tax system often invests gas tax money in places where the taxes were not generated by building new roads and such. The transport system will work much better is the taxes generated are largely spent on transport projects in the same area. Third, by switching to a user fee there is less incentive to settle on one new energy source. For example, if hydrogen is taxed for transportation there is a strong incentive to promote hydrogen as the new transport fuel. By charging drivers for driving rather than their energy source it is possible to encourage many different types of energy. From a technological innovation standpoint this is a preferable route to take. We will likely end up "nudging" the world towards less driving and cleaner vehicles plus more flecible transportation planning.

So if you live in one of the cities where the U of Iowa is testing, sign up! You get paid, too.
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