McGill prof: We need smart tolls on our bridges

By Doug Sweet

Montreal, like other cities, needs to consider “congestion pricing” – putting a price on traffic congestion the way provinces should be putting a price on carbon, says Economics Professor Christopher Ragan, Chair of Canada’s Ecofiscal Commission, a McGill-based think-tank developing practical policies to improve economic performance and the environment.

Fresh from the publication of a new report on how provinces should be responsible for carbon pricing, Ragan says the commission will soon prepare a report on the need for cities, particularly big ones, to tackle the “massive costs” associated with traffic congestion, including wasted time and wasted resources.

Tolls on bridges and major highways are part of that equation.

For the moment, the Ecofiscal Commission’s recommendation that the provinces be responsible for carbon pricing, backed by commentary pieces in The Gazette and La Presse earlier this month, has captured the media’s attention. Most of Canada’s premiers gathered in Quebec City Tuesday to discuss climate change, a day after Ontario joined Quebec’s cap-and-trade carbon-pricing endeavour (along with the State of California). Though they failed to reach a consensus on carbon-pricing, Ragan said Quebec’s cap-and-trade system will pay significant dividends.

“Our focus on this report was on carbon pricing, because we think there’s an urgent need to get carbon prices in place across the country and we think provincial action is the best way to do that,” Ragan said in an interview. “So our focus in the report is on why climate change is an urgent issue and why carbon pricing is a good solution, and why carbon pricing by the provinces is a very good and practical solution.

“My guess is that five to seven years from now we’ll look back and say, ‘Aha! This really did the job. It reduced emissions and it did so in a cost-effective way.’ And I think a lot of Quebecers don’t know that.

“Quebec has a system in place that is approximately as good as B.C.’s much-celebrated carbon tax,” Ragan said. “Different system, it’s a little bit more complicated to operate, but it is a well-designed system.”

Ragan notes that cities like Montreal may not have much of a role to play in establishing carbon prices, but they can work with the provinces to ensure policies work in tandem to advance growth and address environmental issues.

“I think that carbon pricing probably isn’t a thing to be done by cities; it’s probably best handled by the provinces as a whole. But here’s another thing congestion pricing can do; it can actually reduce the extent to which there is a drive toward urban sprawl.

“When people think about sustainable cities of the future, they think about increasing density in the urban core. And you think about policy that would actually tilt things in favour of reducing sprawl and actually increasing the density of the city. And congestion pricing would be one thing that could do that,” he said.

“But cities can also play a role in terms of building standards, for housing and other buildings, which I think can play a very significant role. Building codes that improve the efficiency of the building, that improve the heating and the cooling – those are actually quite well done by cities, in conjunction with provinces. And that can play a big role in terms of reducing greenhouse gases.

“Those things can be very complementary to a provincial carbon-pricing system. They can work in tandem with carbon pricing; in fact some of them would be driven by carbon pricing. You start attaching a price to carbon emissions and you’re creating a clear financial incentive to actually make those buildings more efficient.”

Ragan said it is important for different levels of government to work together to make their policies complement one another.

“What you need is to have governments talking about this with each other. So, the provincial government can sit down with its cities and say ‘we’ll do this and you guys do that, that and that and we’ll make it all fit together,’ ” he said.

Back to congestion pricing.

“The problem is that people have basically free and unlimited access to driving on roads, and when they do, especially during peak hours, they impose costs on other people in terms of time – and so the result is that people spend massive amounts of time (in aggregate it’s a massive cost) spent white-knuckling it on a highway or a freeway, or city roads for that matter – time spent away from either pleasant activities or work activities or both.

“The latest technology (already in use on the Hwy. 25 bridge between Montreal and Laval) actually allows you to attach a price that is a function of or depends upon the busy-ness of the road. So an empty road at 2 in the morning may have no price attached to it, where exactly the same road at 6 p.m. may have a significant price attached to it. And you’re typically talking here about major arteries, not minor roads. And a toll on the Champlain Bridge, a toll on any bridge for that matter, is playing basically the same role. The toll could be a function of the time of day, so you actually reduce congestion during peak times.”

The debate about resource extraction will continue, Ragan says, noting that it’s important for Quebecers to understand that the province’s cap-and-trade system is a winner, and an important factor in the debate.

Ragan hopes the absolutism that often characterizes the resource-extraction debate can be tempered.

“I think to some extent, perhaps even to a large extent, Quebec’s ability to continue the development of its resources is going to lie in the perception that the people have about how effective Quebec has been in terms of protecting the environment.

“I think the more Quebecers come to know that they’ve got a very good cap-and-trade system in place, the more they would be prepared to accept that some of this development is OK, so long as it is done well,” Ragan said. “I think resource development is a pretty obvious thing – if you’ve got tremendous wealth underneath the ground, it’s kind of crazy to think that you shouldn’t develop it. But you’ve got to develop it in a way that really is mindful of the environmental challenges.

“There’s just got to be some sensible middle ground. And I think the middle ground, frankly, is exactly what the Ecofiscal Commission is all about. It is about promoting economic prosperity, but it’s also about doing it in a way that is very mindful of the environmental challenges. And there is a way to do this. There absolutely is a way to do it and it’s called Ecofiscal.”