Economic Framework for Melbourne Traffic Planning

Abstract

elbourne has the size, population density and car ownership levels of many North American cities but the levels of public transport infrastructure seen in European cities. Although possessing aboveaverage public transport infrastructure it still faces problems of dealing with high car use and socially-costly traffic congestion that amount to losses of billions of dollars annually. The costs include wasted travel time, increased stress and fatigue, excessive fuel and maintenance costs, lower worker productivity, increased transport capital requirements, reduced business competitiveness and deterioration of an otherwise aesthetically pleasing environment. Although these costs can be reduced with demand-side policies, roads are the only public utility in Victoria not targeted for efficient pricing. In this paper, economics-based policies are proposed for ameliorating Melbourne’s traffic congestion. A suite of demand-side strategies is suggested including a cordon pricing scheme for the central city, parking policies which address boundary problems on the cordon perimeter and pricing of major arterials and ring-roads. These policies should be accompanied by ‘traffic calming’ measures on smaller urban roads. Auxiliary public transport pricing reforms are advocated promoting competition. Current policies of concentrating urban expansion on city boundaries are criticised. The proposed policy mix is a stop-gap bringing congestion closer to efficient levels thereby facilitating transfer to comprehensive electronic pricing. Comprehensive ‘first-best’ pricing of Melbourne’s roads by satellite monitoring is impractical due to high start-up costs relative to congestion. However, inexpensive demand-side policies can reduce congestion costs. This paper exposits such policies. Section 2 overviews Melbourne’s transport system. Section 3 analyses congestion policies emphasising demand-side tactics and costeffective cordon pricing of the city centre. Supply-side strategies, information policies, indirect demand-side strategies and other policies are discussed. Section 4 outlines a plan to relieve radial and central traffic congestion by curb-side pricing, cordon pricing and ‘traffic calming’. Section 5 explains why direct demand-side strategies are generally unsuited to reduce cross-town congestion. Section 6 offers conclusions and final remarks.