Dutch law charging by distance driven a brave idea

Imagine if every road was like Hwy. 407 – the more you drive, the more you pay.

It's a promising, brave idea that seems set to become law in the Netherlands, where the cabinet has approved and sent to parliament what it calls "roadpricing."

The basic idea: annual licence fees and the purchase tax – which now adds about 40 per cent to a new vehicle's cost – will be replaced by a small charge for every kilometre driven.

It's no surprise that the details are complex, but the government and transportation economists insist the system will work, and it hasn't yet incited a huge outcry.

The scheme requires high-tech gadgetry, still being developed. "Registration units" linked to a global positioning system are to be installed in each of the Netherlands' eight million cars and trucks. They'll count the kilometres driven and send the results to a billing centre, which will then invoice car owners. The government promises to subsidize at least part of cost of the units, which are to be made, installed and operated by private companies.

Owners of smaller, highly efficient cars will pay a lower rate than those with gas guzzlers. All will face a surcharge for driving in rush hour or other congested times.

Emergency vehicles will be exempt, as will cars owned by people with disabilities.

Drivers' privacy will be protected, the government insists, because the system will track only the distance a vehicle is driven, not where it goes.

When it's launched – the target is 2012 – the lowest charge, at current exchange rates, would be the equivalent of 4.7 cents per kilometre. It's to gradually climb to 9.4 cents by 2018. During the same period, the current taxes will be phased out.

Based on pilot studies, the government projects roadpricing would reduce the distance driven by Dutch motorists by 15 per cent, time lost to congestion by at least 40 per cent, and collision deaths by seven per cent. Greenhouse gas emissions are forecast to decline as motorists shift to walking, cycling or public transit. Transit use is expected to rise, but only by six per cent.

While the current taxes go into the government's general revenues, income from roadpricing would pay for roads and transit.

Skepticism about the plan begins with getting the tracking and payment systems working properly, then moves quickly to financing. The transport minister estimates 59 per cent of drivers would pay less under the new scheme but insists it would still bring in as much revenue as the previous taxes.

But if roadpricing encourages owners to drive less, avoid rush hour and buy efficient cars, shouldn't revenue drop? In that case, the shortfall would have to be covered by raising other taxes or cutting spending. If they don't decline, that means the fee hasn't been set high enough to achieve its presumed benefits.

Will drivers have to pay user fees for the "registration units"? The government doesn't say, although it raises the possibility by suggesting the companies that provide them could offer additional services such as direction finding.

And can privacy be assured if the system – as it must for rush hour and congestion surcharges – knows when and where a car is driven?

We're likely far from anything like roadpricing. Anguished howls greet even rumours of tolls on the Don Valley Parkway or the 401. And our sales taxes and annual fees are so low that replacing them with mileage charges would have little impact.

Still, we ought to consider the idea. With adjustments, including measures to prevent abuses like the current Hwy. 407 billing fiasco, it makes great sense.

peter.gorrie@sympatico.ca

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