It has been a year since the Danish Parliament last agreed on the future taxation of passenger cars.
We are now again discussing a more far-reaching and perhaps also more appropriate model for taxation of car use than the one the parties agreed on in December last year.
This week, the Danish Environmental Economic Council recommended the politicians to completely drop the agreement from December and thus wave goodbye to the car registration charges, and instead adopt distance-based charges.
Researchers from DTU and Aalborg University have now prepared two suggestions on how the future of driving charges rather than registration charges could unfold—initially on an experimental basis.
Forligskredsen er blevet præsenteret for pitches fra to forskellige forskerteams og skal på baggrund af det træffe valg. Når det sker skal der nok blive kommunikeret om det.— Benny Engelbrecht (@BennyEngelbrech) December 8, 2021
In the political agreement from December last year, DKK 20 million was set aside precisely for this specific purpose, in the form of an experimental development of road pricing, also known as distance-based charges.
In fact, the parties recognised that “road pricing will be a better way to tax congestion and the damage and health costs associated with driving”.
The agreement refers to “a public-private development cooperation” that can examine the technological and administrative challenges associated with road pricing for passenger cars.
At the Department of the Built Environment at Aalborg University, researchers Erik Kjems, Toke Haunstrup Bach Christensen, and Harry Lahrmann imagined an experiment with 20 000 volunteer drivers from all over the country, who via a letter in the Danish digital post system e-Boks are brought in to act as guinea pigs for a period of three months, during which they must pay to drive on the roads.
But the road charges will, as the Aalborg University researchers imagine, depend on whether they drive in the countryside or in the city, and whether they do it during rush hour or outside rush hour.
The technology can be chosen from one of the three companies that have already developed three well-known technologies. The researchers mention Saphe, Siemens–Yunex Traffic, and Connected Cars.
“The prerequisite for choosing the technology is that drivers themselves can ‘declare’ when they are driving, after which certified companies calculate, collect, and settle road charges on behalf of the drivers,” it is said in the presentation to the politicians.
The companies choose the technology themselves and are responsible for calculating the correct charge, while the system is controlled with already existing number plate scanners, which are used to enforce the current environmental zones. In addition, new technology is introduced in the form of a Bluetooth transmitter mounted on the windshield of the car and sealed by an authorized inspection centre.
With the experiment, the politicians will get evaluations of the technology and attitudes to road pricing of 20 000 drivers after having tried it out themselves, it is stated in the presentation to the conciliation committee.
In addition, the experiment should give an estimate of the behavioural effects of different charging systems, in which one can pay between one half and one Danish krone per kilometre, possibly with a starting rate of DKK 3.
In addition, the researchers note that the experiment will have a control system without surveillance, as the drivers themselves must report that they have driven on the roads.
DTU’s Transport Division with professors Otto Anker Nielsen and Ninette Pilegaard, who are head and deputy head of the Transport Division, respectively, together with the company Sund & Bælt and Mogens Fosgerau, professor of transport economics at the University of Copenhagen, outlined another proposal that has also been presented to politicians.
This project also addresses the benefits of a privacy-friendly experiment with existing technologies.
It sounds like this experiment would not be an experimental development of technology, but that it would be based on existing technology with satellite receivers and smartphone-based solutions to avoid technology risks and to keep the cost of the experiment down.
Sund & Bælt has, among other things, provided the solution for environmental zones, which are enforced using cameras that read license plates. Thus, the choice of their proposal for a road charges experiment will also involve reusing existing control systems and back office functions to minimize risks and keep the budget to a minimum, building on existing experience.
The project at DTU has a geographical focus on larger cities with congestion and health risks, which could be Copenhagen and Aarhus or possibly also Odense and Aalborg.
“Technologically, it’s possible to track driving, Precision of different solutions has been tested in experiments, including in Denmark, and road pricing can be handled in the EETS system (European Electronic Tolling Service, ed.). The challenge is making road pricing cost-effective,” write the researchers from DTU and others in the presentation to the politicians.
Regarding experience with the technology, reference is made to the AKTA experiment in Copenhagen carried out from 2000 to 2004 (Alternative road and congestion charges), and that Sund & Bælt has tested the precision in 2015/16 by installing satellite receivers in cars driving in urban and rural areas. The precision in this test was 99.2 percent.
Sund & Bælt also has experience with control systems without arm barriers from, among others, the town of Frederikssund and Crown Princess Mary’s Bridge as well as the environmental zones.
“We propose to test both a time- and a distance-based solution. With the time-based solution, it will be possible to choose between daily or minute rates. One pays for the time spent driving, and it would be self-declared via app or web, up to 48 hours after driving.”
An app can help with registering where and for how long one drove.
It also has an advantage in relation to privacy and surveillance since no attention is paid to where the driver has not driven.
Another option is the distance-based, and perhaps not so privacy-friendly solution, where one can choose between a satellite receiver in the car or, more simply, a smartphone app. Payment for both options will depend on the kilometres travelled in the car.
“Mileage is registered automatically. However, drivers must ensure that equipment is switched on and activated, while the system is controlled with license plate cameras and equipment logs,” it is stated in the presentation to the politicians.
The researchers, who are also members of the Commission for Green Transition of Passenger Cars, believe that the minute-based system has shown very promising results, because with minute rates it is possible to target congestion very precisely, for example by making it expensive to drive when there are many cars on the roads.
“Unwanted traffic effects” are avoided, the researchers believe, which means detours and parking problems, which would normally be a problem with cordon-based charges paid at an arm barrier. “Seepage traffic” on local roads, where drivers will try to avoid payment, is thus also avoided.
In addition, the technical costs are low because not much equipment is needed for surveillance, and less data is needed. This means that there less monitoring than with detailed distance-based systems.
“The system is simple and results in a positive economy,” it is said.
The core of the DTU experiment is to make it as realistic as possible, the DTU researchers state and for that purpose propose to take, as a starting point, only a fraction of the participants the Aalborg University researchers had imagined in the second trial, namely a group of just 2000–2500 subjects.
These people would then complete three test periods that would each last 12 weeks and include a so-called base period and two road pricing solutions—a time-based and a distance-based solution.
The experiment would be staggered over a year to correct for seasonal variation.
And now for the money.
The researchers propose to set aside money from the DKK 20 million for a driving budget, so the subjects get money to drive with, and their unused budget can be claimed as cash. So there is “real money” at stake.
Budget for the participants in the experiment is expected to be DKK 4.5 million.
“A real-life experiment will give the best results,” reads the summary of the DTU project, which expects to be able to clarify both behavioural effects and users’ understanding of the solutions.
“Experience shows that there is a difference between real behaviour and questionnaires or theoretical models. Participants’ critical evaluation is different when there is money at stake—both in terms of technology and levels of charges. Existing technologies are considered to be fully adequate and ready to be included in experiments, including the reuse of cameras in environmental zones. This provides the most realistic economic results and at the same time reduces project risks and costs of the experiment.”
In addition, the participants’ behaviour in the encounter with the technologies would also be described, including which solutions provide the most “optimal” user behaviour in relation to administration costs.
The Commission for Green Transition of Passenger Cars, which the same researchers are also members of, already reviewed congestion charges in the big cities, based on “moderate tariffs” of DKK 0.2 per minute and DKK 0.45 per minute during rush hour.
It is expected that the conciliation committee behind last year’s major car taxation agreement will decide on its preferred pilot project already this month.
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