Congestion Pricing: Regulation Works for Us, What About Cost?

The US Environmental Protection Agency (EPA) has tightened the standards for certain toxic emissions from mobile sources. Basically, the EPA expects that gasoline in all areas of the country will have lower benzene levels than we do now, and this regulation will apply to all American states, even Alaska and the Northwest that have currently the highest benzene levels. The new regulation, EPA developed, promises better environment in the future. Expected cost, EPA estimated, is about $400 million annually by 2030 in order to prepare and run more strict emission tests in all states in the U.S, and America could save $6 billion in annual health care spending.

Even though we have great benefit in the future, we still have to face expense for ourselves today because there is also a hidden cost that we are responsible for. By 2010, all the automakers have to go through the regulation. More strict emission tests will press the all the automobile manufactures, and the pressure will turn into real cost to all automakers, so that the expected price of the automobile will go up. Increased price of the car will affect the other cost such as insurance and maintenance. Assumed future benefit, $6 billion, from the health care spending is not the actual money that we could have on our hands. The saved money will be spent by gorvernment for our own good, but the cost we are looking for is the cost that we actually have to pay directly or indirectly today.

Congestion pricing is the one type of fees for things heavily used. When we cross the Golden Gate Bridge, the money that we pay is this kind of fees. City of San Francisco uses the money for citizens, but the main reason that the city collects the money is not for raising the budget. The city believes that congestion pricing encourages people to car-pool, or use public transportation, so the gas spent and air pollution would be decreased in the city, and the city able to have better traffic condition. However, what we do is to spend another dollar for government.

We have huge financial benefit compared to expected cost that we have to spend, and we can expect better environment and healthcare. Therefore, the cost that we are facing is necessary and reasonable. This new regulation sounds great to all of us, but we cannot just be happy about it because there is price to pay that we don't see like congestion price.