Congestion charges won't be needed in 2015—the oil will be running out. We must rationby David Fleming / July 23, 2005 / Leave a comment
So—we have been invited by the government to take part in a debate about whether it would be a good idea to set up a congestion charging scheme, monitored by satellite and covering the whole country.
Traffic congestion is a symptom of a much deeper sickness—relentless mobility, visible at any time in the day in every developed country in the rivers of steel pouring along motorways. Contrary to the claim by Rod Eddington—departing chief executive of British Airways and the government’s transport adviser—that “a more mobile world will also be a more stable world,” unlimited mobility has many perverse consequences. Local communities lose their networks of sociability, their social capital; local markets for small traders are crowded out, as is local production of daily essentials such as food. The sense of place is being wiped out of our lives; instead of staying put and solving local problems, those most able to do so simply move on. The constant churning of rootless people is deeply destabilising. And when serious energy shortages begin to cripple transport, the almost complete absence of local self-sufficiency will become abruptly apparent.
The government’s proposal for a country-wide congestion charge, with a completion date of around 2015, is entirely incoherent. Its main flaw is that, by 2015, the problem it is intended to solve will not exist. There will not be the oil to fuel large volumes of traffic in the future: there will not be a congestion problem, there will be an “empty roads” problem. Oil production is now close to its production peak, which will be passed before 2010. When that happens, production will start to fall; we will move into a sellers’ market, dominated by a small and turbulent clique of tough-minded producers. Prices will be very high; there will be shortages and interruptions in supply, and this will lead to transport systems all over the world breaking down with increasing frequency and for increasingly long periods. At the end of the next decade, the gas market will follow a similar path.
And here are some other flaws. The government’s proposal does not provide any long-term view—it does not encourage people to take the effective action now which is needed if they are to reduce their energy needs in ten or 20 years’ time. It does nothing about the energy problem as a whole. It is unfair to people and small traders with the least money. It spreads traffic around from major roads that are designed for heavy traffic to minor roads that are not. It does not distinguish between small cars and energy-hungry 4x4s. It adds to the hassle and regulation of our lives, and sets up a massive infrastructure for unprecedented and comprehensive surveillance. It is extremely expensive, so that it will suck funds away from more effective responses to the energy problem.
The alternative is to establish a rationing scheme for all uses of energy, and covering all users—consumers, industry, the government and its departments. A scheme which would do this was first described in 1996; it is now well established as a policy option called “domestic tradable quotas” (DTQs).
This is how it works. Rations of energy are measured in units, which are defined in any way that may be appropriate. When the main purpose is to reduce consumption of all the fuels that contribute to climate change, the proper unit is the “carbon unit,” defined as one kilogram of the carbon dioxide (and its global warming equivalents) produced when fuel is burnt. Or, if the main purpose is to maintain a fair distribution of scarce supplies of oil (petrol, diesel or fuel oil), rations would be measured in “oil units.” However the units are defined, every adult gets an equal entitlement; all other users obtain their units through banks which in turn buy them through a weekly tender modelled on the weekly tender for treasury bills.
The system is similar to the old ration books, except that it is electronic, with most transactions being carried out automatically, so that people would not have to do any more than at present when they pay their energy bills by direct debit or their petrol bills with a swipe of their card. One of the advantages of doing it this way is that it allows everyone in the scheme to trade their units—so that, if they run out, or have more units than they need, they can buy or sell them on the market.
The whole scheme is contained within the limits of a budget, which is set for 20 years ahead, and progressively reduced year by year, guiding the economy into deep reductions in the use of fossil fuels. The budget is the scheme’s most powerful feature: units are issued strictly within the budget, so it is impossible for more units to be bought and sold than the budget allows, and this guarantees that the budgeted reductions in fossil fuel use are actually achieved. And the scheme is kept at arm’s length from the government, since the budget itself is set by an energy policy committee, similar to the monetary policy committee of the Bank of England.
This scheme could start quickly. The detail is now well understood. It has already been published in the House of Commons as a ten-minute rule bill by Colin Challen MP. Its cost, in comparison with the congestion charge, is trivial. It is a joined-up scheme, addressing the whole of the energy problem within a single policy framework. It gives the essential long-term signal for action to be taken now in order to achieve seriously useful results in the future—a critical feature which no form of energy taxation can provide. It creates a strong incentive to produce renewable energy and to use energy in all its forms more efficiently. It is fair. It is, in fact, rationing made easy by electronic technology. And DTQs are an effective solution to the problem of congestion.