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Incentives and Green Behavior - Denver vs Stockholm
The city Stockholm, Sweden wanted to reduce noise, smog, and other pollution caused by traffic congestion and gridlock in their downtown area during the busiest hours of the day. So they instituted a congestion tax, charging vehicular traffic to enter the affected areas during the critical hours. The congestion tax has worked remarkably well, and the citizens of Stockholm enjoy the improved quality of life.
Denver is different. Denver’s response to congestion on I-70, I-25, I-225, and named streets was to shunt traffic around the city core by building E-470, a modern superhighway with a steep toll for use. I’m sure the thinking was that travelers would gladly pay for the convenience of faster travel and this would pay off the mortgage from financing the construction.
Thing is, there seems to be a sub-optimal impact on driving patterns. During busy hours of the day, the city streets and older interstate routes are clogged with slow moving congestion, while scant few cars zoom down the bypass with hundreds of yards of headway between them. I had a chance to visit Denver recently and found that most of the drivers I met - and particularly those using rental cars (which have a discouragingly arcane system of toll cost recovery) - avoid the toll and use the older roads.
The mortgage on Denver’s E-470 may be getting paid, but what would the greener incentive structure look like?
10. February 2010 at 13:43
Even the best Government incentives do tend to have a downside. As an example, homeowners have contacted us here at SolarUK to say that it’s a pity they cannot take advantage of the new Feed-in Tariff for microgeneration with solar photovoltaics - existing microgenerators, who perhaps should be commended for having been pioneers, do not qualify for the scheme (which comes into force in April and will benefit those having systems installed from then on).
10. February 2010 at 15:25
Ah, yes. The risk of pioneering. Sometimes the rewards are not just. Have you ever bought a high end computer just before the manufacturer rolls out the new model having twice the power at lower cost? In unregulated markets we expect such things, but when government intervenes, it must be careful, as the new incentives are funded in part by taxing those who exhibited the desired behavior on their own initiative without government reward. We could write a tome of discourse on this general topic, but I’ll leave it there. Thank you for your comment.
16. February 2010 at 11:53
It looks likely that the Feed-in Tariff scheme in the UK will be funded by a levy on energy bills, which could conceivably affect everyone who is unwilling, or unable, to turn to renewable energy. Surprisingly, funding arrangments have not been finalised yet.