ERP: Pollute More, Pay More

By Dante Archangeli

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Hong Kong through the Looking Glass: A Series on Sustainable Planet, People, and Prosperity

Now that I don’t own a car and frequently ride Hong Kong minibuses, I see more television, or at least commercial video, than I’ve seen since in years. Bus TV exposes me to Hong Kong phenomena that I’d otherwise be unaware of. Since its sound is often drowned out by engine noise, or replaced by the driver’s favorite radio station, visual impact trumps audio. For example, Fiona Sit has become my Cantopop muse. Other singers who are more doe-eyed or perky also appear on bus TV, but they don’t match Fiona’s arresting costumes, makeup, and imagery. Sun Pegasus, my favorite Hong Kong sports team, scores far more goals in their two-minute promotional clips than in their 90 minute matches. For a while I was eager to see Zombie Fight Club, but once the ads stopped that urge subsided. Most importantly, Bon Bonn has taught me to wear a seatbelt on the bus to avoid head bumps and sticky tears. His lesson would be more effective though if he didn’t seem so smug about it.

If Bon Bonn were a real Hong Konger he'd have more empathy for Be Bee.
If Bon Bonn were a typical Hong Konger he’d have more empathy for Be Bee. (source: BonBonn.com via YouTube.)

Previously I’ve written about HK and Singapore’s efforts to reduce traffic congestion and its resulting pollution through automobile population control and proposed tram-and-pedestrian-only zones. This post continues that exploration by looking at schemes that the regions have implemented or are considering, such as Electronic Road Pricing (ERP), to incentivize people to reduce the use of personal vehicles on crowded streets and, like I do, use public transportation instead.

Hong Kong's public transportation system has a wide variety of modes.
Hong Kong’s public transit system has a wide variety of modes.

The Hong Kong and Singapore governments and transit operators work hard to motivate people to use public transportation by facilitating, developing, and operating top notch mass transit systems. The HK government has financial incentive to do so since it owns 76% of the MTR Corporation, Hong Kong’s subway builder/operator and real estate developer. Both regions have public transportation systems that are easy to use, affordably priced, and examples that most U.S. cities could learn from. Hong Kong’s MTR, light rail, trams, buses, and ferries are fast and frequent. Their integrated routes blanket the entire region even into rural Country Parks. Vehicles are kept scrupulously clean and the MTR is surprisingly quiet. Systems are publicly franchised and privately, or quasi privately, owned and operated and are profitable.


Small changes in travel behavior can have large impacts on traffic congestion. Researchers working at MIT and UC Berkeley using mobile phone data to track traffic contend that reducing car trips by just a little pays big dividends. For example if one percent of the vehicle trips in a small number of critical locations were time shifted or eliminated, it would reduce the commute-time durations for all other Greater Boston area road users by 18 percent.

The Hong Kong Environment Bureau’s 2013 Clean Air Plan for Hong Kong plan acknowledges that “Traffic congestions… generate higher pollutant emissions…” and that “we need… to give priority to public transport, manage transport demand, and divert traffic….” Unfortunately the city’s efforts toward traffic reduction appear to be nonexistent (other than indirectly through its MTR ownership) and future plans consist only of considering bus franchise route modifications and a proposal to study adjusting the toll rates of the three cross-harbor tunnels to try to even out congestion at tunnel approaches, but not reduce overall traffic volume.

Singapore on the other hand has been a world leader in reducing personal vehicle use and improving traffic flow by developing innovative road congestion pricing mechanisms. It was the first city in the world to implement Electronic Road Pricing (ERP) which charges drivers for using roads based on the amount and timing of their use.

Singapore's ERP gantries are surprisingly unobtrusive in urban areas.  I hadn't realized  I'd photoed any until I reviewed my files.
Singapore’s ERP gantries are relatively unobtrusive in urban areas. I hadn’t realized I’d photoed any until I reviewed my files.

The ERP system consists of “in-vehicle units” (IUs) which communicate via radio with “gantries” located along priced streets. Each time a vehicle passes a gantry, ERP charges are deducted from a cashcard inserted into the IU. Like Hong Kong’s Octopus transit payment cards, ERP cashcards can be “topped up” at a variety of locations. Cars, taxis, and “light goods vehicles” are charged standard rates. Motorcycles are charged 50 percent of standard rates. “Heavy goods vehicles” are charged 150 percent. ERP rates are determined by regular reviews of traffic speeds on priced roads and adjusted accordingly. During peak hours, charges change every half hour to help spread traffic flow over a longer period to keep speeds in optimal ranges. ERP rates, gantry locations, and real-time traffic conditions are posted on government web sites.


Singapore first introduced road pricing in a “restricted zone” (RZ, essentially central Singapore) in 1975 using manual fee collection methods. This resulted in a 45 percent decrease in traffic in the RZ. Later road pricing was extended to major expressways. ERP was implemented in 1998. Currently ERP II based on GPS technology is being tested. The Singapore government claims that ERP has been effective in addressing congestion and that the average speed on “priced” roads stays within optimal speed ranges even during peak hours. Initial monitoring indicated that during ERP hours of operation, expressway and RZ traffic volume decreased by a further 15-16 percent. Additionally according to a 2014 article by the Danish Architectural Center “65 percent of commuters now use public transport, an increase of nearly 20 percent.”

ERP gantry locations and real time traffic speeds.   Traffic on green roads is moving at       .  Yellow roads are moving at       .
Map showing ERP gantry locations and real-time traffic speeds. Green is fastest. Red is slowest. (source: onemotoring.com.sg)

However even if ERP didn’t shift travelers from private automobiles to public transportation, reducing traffic congestion alone is beneficial. As the Singapore ERP website on its FAQ page correctly points out “Traffic congestion is costly to the individual and society. It results in the loss of productive hours, environmental pollution, wasted fuel and adverse health effects. Congestion… undermines quality of life and the overall efficiency of the economy… [B]uilding more roads do[es] not address the underlying problem that if road usage is not priced, it will be overused. ERP is the only measure that deals directly with the problem by pricing the externalities, so that motorists take into account the cost of congestion caused by their driving on others.” In other words, ERP incorporates at least some of the hidden costs of driving that are usually born by the general public, like increased health costs caused by increased pollution, into the operating costs that individual drivers pay. If you drive more on roads and at times that are subject to congestion and its resulting increase in pollution per vehicle mile, you will pay more.

A Feasibility Study of ERP commissioned by the Hong Kong government in 1997 reported that a two-year pilot ERP program conducted in Hong Kong 12 years earlier “demonstrated that ERP was technically feasible and could produce economic benefits.” The Study also estimated that if ERP were implemented in HK “40% of car trips in the morning peak may be diverted to public transport” and found that “ERP could generate transport operation, economic and environmental benefits”. Based on Singapore’s assessment of ERP’s benefits as well as the Hong Kong government’s own studies, one would expect that Hong Kong’s leaders, with their faith in monetary benefit, would embrace ERP. Regrettably that hasn’t been the case. In the 29 years since its successful ERP pilot program and the 17 years since its positive Feasibility Study Hong Kong has done nothing to move toward implementation of ERP.

My next post will continue examining HK and SG actions, and inaction, to reduce pollution caused by driving.



Dante Archangeli moved to Hong Kong from Tucson, Arizona, where he focused on sustainable construction and development. He is an MIT and USC educated project manager, entrepreneur, and builder.

All images by Dante Archangeli except where noted.

  1. “scores far more goals in their two-minute promotional clips than in their 90 minute matches” << I laughed out loud.

    If Texas had public transportation like HK, I'd be happy to go without a car. The constant traffic congestion doesn't benefit anyone or anything.

    And speaking of building more roads, I just saw an article about expanding Broadway back in Tucson and a shop owner in that area is saying that expansion will cause him to have to close shop (after 60 years of being there). 🙁

    1. Thanks for your comments. Tucson has been talking about widening Broadway since the mid ’80s, about the same time that HK started considering ERP. It will be interesting to see which, if either, happens first.

  2. Very clever, that Electronic Road Pricing. Reduces use by low income folks while the monied could care less.

    1. Thanks for your comment. ERP is equitable and works especially well in Singapore because public transportation is convenient and economical, and for the same reason would work well in HK. People who do not drive in SG and HK are not disadvantaged.

      But even in places without good public transit, ERP can produce egalitarian benefits. The key is how rates are structured. Where there is good public transit, it seems fair to structure rates to encourage people to substitute public transportation for personal autos. Where there is not good public transit, perhaps rates should be structured with the less ambitious goal of only reducing peak traffic volume and congestion.

      Most drivers make several car trips to accomplish what they could do in one. Or they live far from where they work, shop, go to school, etc. ERP can encourage those drivers to plan their driving more efficiently and move closer to where they travel most. When that happens traffic volume and pollution are reduced.

      Infrastructure, whether it’s water systems or roads, is built to accommodate peak demand. To reduce peak water demand in Tucson, water rates were increased in the summer when demand was traditionally greatest because of landscape irrigation. So people have switched to low-water-use landscape. That’s not inequitable, even though it impacts the wealthy less. Nobody needs to have a lawn. As long as rates are appropriately structured so that the poor are not disadvantaged, ERP can work the same way.

      No driver in the world pays the full cost of driving. When all the hidden costs resulting from driving are taken into account including, for example, diminished public health due to traffic pollution (which likely disproportionately impacts the poor), ERP may, on balance, be better for the less affluent. That’s what a friends thinks. He speculates that the reason HK hasn’t adopted ERP is because it’s mainly those in power here who drive.

  3. 1. New border crossings and improvements to existing ones will increase the daily vehicular trip capacity to over 200k. Current daily trips below 50K. Existing private car fleet in HK around 600k. No parking facilities at the border, stations, or outside old / popular districts. Impact of the additional vehicles will be huge.

    2. Development of new towns in NT with limited public transport beyond main route will increase demand and use of private vehicles as this will materially shorten travel time. Furthermore, GDP and household income/wealth will continue to increase making car ownership more affordable.

    3. Congestion in HK is primarily queuing of traffic which is attempting to enter older urban districts.

    Given the above – how to best organize electronic road pricing? And what additional measures are necessary to make it work.

    I would suggest charging vehicles for entering/using roads in older urban areas and to build car parking facilities near these popular areas.

    1. Thanks very much for your insights, Paul. I wonder if there are many cities of HK’s size where visitor generated car traffic has the potential to be greater than locally generated car traffic.

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