Electronic Road Pricing (ERP) is an electronic system of road pricing based on a pay-as-you-use principle. It is designed to be a fair system as motorists are charged when they use the road during peak hours.
Externalities:
Negative externalities will result if ERP was not implemented. Serious traffic conjestion would arise if no charges were put into place and with that, a negaitve externality would have to be bourned. Traffic congestion will delay the transportation of goods to their various destinations and result in economic loss and workers may be caught in the jam, reducing the company’s productivity as the workers’ time spent on the roads could be used to earn profit for the firm; investors would pull out from a country that offers low efficiency and income. Furthermore, excess number of cars on the roads would cause air pollution and this may bring about health risks to the public which in turn will bring a decrease in productivity in workers as well as a high cost of medicial fees that has to be incurred by the government.
Other the other hand, the implementation of ERP brought about positive externalities. The public get to enjoy a clear-air environment and hence less likely to fall sick and therefore work productivity can be increased. Furthermore, as traffic congestion is relieved, drivers would not have to wait for long hours and they are likely to be in better mood and therefore they could perform better in their job requirements which would in turn bring about economic growth.
There are other countries with road pricing systems similiar to that of Singapore. Its main motive is also to relieve traffic comjestion, especially during peak hours.
In Norway, road pricing is fully electronic using a system called the Autopass with most local drivers purchasing a tag which is automatically read on passing the detectors. The same system is used throughout Norway for toll roads and congestion charging schemes etc. Motorists without a tag pay a fee at a manual barrier.
Road Pricing is definitely a good way to reduce traffic conjestion. Take Thailand as an example, on the average, 2hrs are wasted everday on traffic jams, which brought about huge economic loss.
Responses of the public on ERP:
An interview was conducted with a group of adults, aged from 25 to 45 who are frequent users of private vehicles to find out their views on the Electronic Road Pricing (ERP) in Singapore.
They were asked if the implementation of ERP benefited them in any way, and most gave positive feedbacks. Mr. Tan Chee Leong, a businessman whose office is located in the Central Business District (CBD) said, "Every morning I drive to work, and it is normal to have the CBD crowded with vehicles. However, with the implementation of the ERP, the traffic jam was greatly reduced at the outskirts of the CBD, as motorists are discouraged to use the roads in CBD to get to other destinations. I am seldom late for work anymore."
Another feedback came from Mrs. Goh Li Ming, who said, "During weekdays, I would often go to Orchard Road for shopping. The gantries located on the roads that link Orchard road to the CBD benefited me a lot. Motorists will be charged twice if they use Orchard Road as a shortcut to enter the CBD, which discouraged them and diverted them to use other roads to get to their destinations. As a result, Orchard road is less jammed, making my shopping trip there more pleasant."
Most of the other adults felt the same way. Though they always complain about having to pay for ERP, in truth, they gain a great deal from this implementation. Another benefit of ERP that they mentioned was the level of pollution. When the roads are congested, car exhaust will accumulate in that area. ERP will reduce the amount of traffic in that area, which as a result, lower the level of pollution and allow people to enjoy a cleaner surrounding.
One major criticism is that road pricing would hurt the poor. It would not. The purpose of road pricing is to earn from the richer of the society. Those on high salaries would be happy to pay a few pounds to be able to get to their work at 9am without having to rise at the crack of dawn. Those earning good wages would travel then and pay for the privilege. Those having low incomes would travel at other times of the day to avoid having to pay. However, survey results have shown that nearly 65% of people in the lowest real income category do not own a car. Thus, they would be unaffected by peak charges.
Credits: Gao Ya, Jane Wong, Rachel Pek and Koh Kaiyan
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4 comments:
prolly you can label whats the MPB, MSB, MPC, MSC?
yanling
Shouldn't you define what positive and negative externalities are? Also, does ERP really help to reduce traffic congestion? During peak hours, there are still many cars on the roads..
Sim Yok Teng
i didn't know about the "earning from the richer to give to the society" part. so yupp, learnt something new!
adeline.
this is purely an article based on thesis. If you actually bother looking at the practical model of ERP system on local road, it does not relieve pollution nor congestion. It simply diverts it to somewhere else outside the ERP gantries.
It is true that the gantry serve little purpose to the richer population. But have you thought of the so called poorer population who still have to report to work at the same time as the richer people. By waking up earlier to avoid the ERP is a compromised in standard of living. The negative externality also extend to people living outside the ERP area who used to enjoy smooth traffic roads but now end up having congestion due to the roads becoming an alternative route for those motorist trying to avoid the traffic.
All in all this is a one sided argument and should be improved.
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