John Siraut, Jacobs: How surface transport could be decarbonised via economic incentives

Sarah: We've had a slight change of plan here. So I said it would be two people, Paul Buchanan and John Siraut. But they've actually decided that John's going to do the presentation. But when we get to the Q&A there, they'll both answer your questions. So it's gonna be John Siraut from Jacobs.

John Siraut: So good afternoon everybody. We've heard some very interesting discussions, but I think a number of elephants in the room that we haven't really discussed so far. I'm an economist and Paul's an economist, and economics is in part about the study of human behaviour. But it's also about giving people's choices. You might remember a few years ago a tax or small charge introduced on the use of plastic bags. 5p charge on the use of plastic bags. The use of single-use plastic bags collapsed overnight, just a very small charge. 5p coin, a coin that some of you wouldn't pick up on the street if you saw it lying there. But it changed people's behaviour. So what I'm going to talk about is how price may potentially change people's behaviour and help address some of these issues about climate change.

We also heard in the last presentation about the government at the moment is building new roads, lots of potential moving to electric cars, but again, that doesn't solve a particular problem, which is congestion on the road network. And solving congestion on the road network if we're talking about building more roads, is also very intensive in terms of carbon. Pouring concrete is very carbon-intensive. So the question that economists often try to help people answer is how do we allocate the scarce capacity of our road network? We saw examples again from something earlier presentations, how space had been taken away from road car use, made available for cyclists. On this particular picture shows you the amount of space used to move the same number of people by different means. So one if we all got in a car, you need three-lane road stretching back a very long distance. If we all jumped on a cycle, a lot less space and the same for a bus. So using-understanding how we make choices and the impact of price is what I want to talk about and looking at charging.

So what are we proposing? We're proposing to introduce effectively a mileage charge for using the road network that every single motorist would pay when they drive. And that would consist of three elements. So the first one is a congestion element. So those of you who are familiar with London will know that London has got a congestion charge. The higher the level of congestion, the higher the level of charge. And again it was very noticeable of a number of presentations. We've all seen slides of traffic jams. Traffic jams are bad for the environment. They cause emissions. They're bad for the economy. So a congestion charge to remove that level of congestion.

The second element is an environmental charge. So again, we've heard talk about how quickly we need to decarbonise transport. But at the moment we're not using the right tools to achieve that. By introducing charging, we can encourage people to move quicker, away from highly polluting vehicles to cleaner vehicles or even potentially outside vehicles at all. And again, we heard earlier today about the fact that a lot of pollution to do with cars are not to do with emissions out of the tailpipe that they're from the wear and tear on the wheels and the tires and the brakes. So again, environmental charge can be related to the emissions of a vehicle, but it can also vary depending on the location you're driving. So in a dense urban area like Birmingham, where you've got lots of alternative public transport available to you, you may have a higher environmental charge than in a rural area where there was impacts of transport will be slightly less.

And the third element is a maintenance charge. And that charge would go directly, the revenues from that will directly go to the operators of the road to pay for the maintenance of the road. At the moment, the taxes you pay on your car use just go to central government and central government spends on whatever it wants to do. So the states of your roads bears no resemblance to the amount of money that you're paying in taxes. Improving the quality of the road. Making them safer, especially for cyclists and pedestrians, is again an important factor in getting people to switch modes. So all the charges we're talking about is based on the distance you drive. The charges will be set by an independent organisation. So it's not a government is not a political decision that's being made.

But the more important element and one which we feel would change people's behaviour is actually how you pay for your journey. So today I came on the train from London to Birmingham. I went to the ticket office or a ticket machine. I got a train ticket. I saw exactly how much that journey was going to cost me to make. If I driven up today, I would guess how much fuel I would use, probably got it completely wrong. I don't have a clue as actually how much my car journey is gonna cost me. And knowing how much a journey is gonna cost you at a point in time is important in changing people's decisions on how they spend their money. So our idea is that you would effectively be able to book a journey on an app. So those of you who are familiar, maybe using uber or lyft or similar companies, you can get a quote. You did tell you roughly how much your journey is going to cost. The same would apply here. You want to make a journey, you get a quote, which tells you how much that journey is gonna cost by car, public transport, or obviously if you're cycling or walking, it's free. And because of the systems that we would operate, and the efficiency we operate, we could also give you a guarantee journey time. So a bit like on the railways at the moment, if your train is delayed by more than a certain time, you get a compensation. The same could apply on the road network. So individuals can make informed decisions about how they travel, make the journeys they want to make and the price they're going to pay. And so it's a very clear indication when you want to make a journey by car, you know exactly how much it's gonna cost. And we know that changes people's behaviour, knowing exactly how much they're paying at a particular moment in time.

It's not a simple exercise to introduce. It will take a number of years to implement, but already we have facilities where you have a black box in your car for insurance purposes some of you may have, which is logging you where you're traveling. Modern cars are all having GPS systems. Which again can log where you're travelling. So it's quite easy to collect the data. Privacy can be maintained. So nobody needs to know where you're travelling to and from, for the use of technology. And either we can have a system where somewhere like the tax office HMRC, who have a very good reputation for maintaining secrecy on records, can maintain the system, or we can have a secure private-sector system delivering it. And alongside that road user charging all other taxes are abolished on car use. So the fuel duty that you pay when you pay up with petrol or diesel, your vehicle excise duty. Some of the tolls that you pay on certain roads would all go.

What does that mean to you as an individual? In any major change like this, there's always going to be winners and losers financially. Some people are going to be paying more. Some people are going to be paying less. So the example we have here is somebody who lives out of a big city out of Birmingham, for example, and drives into work, commutes to work, and therefore drives a lot in what a normally fairly congested conditions. They will pay a quite a high price because of a congestion charge element will come in to play to reduce that level of congestion. So will make that journey easier, but it'll be expensive for them. But we could - in economics, we value people's time. Your time has a value to it. You appreciate that time. So people make this trade-off. Do I want to pay more money to spend more time with my family, because my journeys get quicker? An alternative example is somebody who lives out in a rural area doesn't use their car much at the moment, but they still paying a high vehicle excise duty on that vehicle. They're still paying fuel duty on that vehicle, but the roads are uncongested. They may have a small vehicle, not causing much pollution or emissions, or they're doing effectively, paying a maintenance charge. So, as I say, they will be winners and losers. And in politics, that's always difficult to address those too.

And linked into that, we will envisage a whole range of policies to be supporting it. So one we've already heard that because we're decarbonising vehicles we're losing revenues. Government has got to make up those revenues from somewhere. We've heard about some of the public transport ideas they cost money to implement. And what we would envisage, that we would see a big increase in public transport provisions to enable people to have choices as to what they want to do and to give them alternatives for travelling. So lots of ideas about how you could support the process to address problems that people may have, if they've got older vehicles, et cetera.

For businesses again, businesses probably likely to pay more money, but you get far more reliable journeys than they do at the present moment in time. One of things that we haven't heard much about, and it is about many people travelling. But we're moving to Internet shopping. How many times a week do you have a delivery van trying to deliver something to your home? Often it's an LGV, a light vehicle that comes to try and deliver your parcels. Again, speeding up traffic, we're in an urban area means people can make more trips, but also the costs associated with that. Does it actually make more sense there in future for you to go back to get going to the shops to support your high street, et cetera? So choices that people have to make soon. I've sort of quickly said where the money is going to go. So the money goes to the people who maintain the road. For the congestion charge it would go to government to support additional public transport provisions in urban areas. And the environmental charge would particularly go back to communities which are badly impacted by the emissions caused by vehicles. So Birmingham is a classic example. You've got the M6 running through residential areas. They would receive that money from that environmental charge to make their life a better system. So that's in some way what we're proposing. Road user charging to address climate change and to speed the process up to what you've heard about today. Thank you.

Sarah: Okay, right. So that was your final speaker.