Differential pricing and/or  congestion pricing is almost certainly coming to American's National Parks. It may also come to public lands managed by other agencies and even to wilderness. The concept of this value pricing is simple: by increasing the cost of a good or service it is possible to reduce demand. Reducing demand reduces congestion, crowding or use which, in turn, provides an improved (and thus more valuable) experience for those who can afford the cost.

Stated bluntly, differential pricing is an elitist form of user fee and represents a radical departure from the ideal of equality when used to ration public resources such as roads or open space. Unfortunately, this issue is not on the radar screen of those who might nip this scheme in the bud. I've prepared the following in an effort to change that.

Pasted below is a carefully ordered collection of internet links including short snippets from each web page and a more lengthy excerpt from the final source. I introduce the important concepts using an example that may be familiar to some -- that of congestion pricing for public roads. The source I've selected is a free-market think tank run, until recently, by Lynn Scarlett. Scarlett is currently Assistant Secretary of the Interior for Budget and Policy and exerts enormous influence upon about two-thirds of federally-managed public lands. Following that introduction,  I expose the recreation industry's efforts by to rework the recreation fee demonstration program and to incorporate within it, differential pricing principles. I conclude with a discussion of national parks and wilderness by an unabashed supporter of these fees.

I've provided a roadmap to follow, though I have not provided a stop-by-stop narrative. I encourage you to learn more about this attack upon long-accepted rights of citizenship.

Scott

--- begin quoted ---

Reason Public Policy Institute is a public policy think tank promoting choice, competition, and a dynamic market economy as the foundation for human dignity and progress....

Ten years ago anyone who brought up the subject of road pricing (now known as value pricing), which is charging drivers for road use during the rush hour, could expect instant abuse. That attitude is changing rapidly.

Who are the Critics?
Many people now recognize that rebuilding our roads and expanding our highways cannot alone solve problems such as suburban flight or congested roads. Funding for transportation projects is on the rise as more American cities consider rail systems for their communities. Yet mass transit still has its critics. CFTE has compiled the following list of events, organizations and individuals that perpetuate common transit myths using erroneous information...

<SNIP>

John Charles of the Cascade Policy Institute in Oregon began as an environmentalist and has evolved into a libertarian who promotes congestion pricing and attacks transit and planned growth. His recommendations include: "Local transit taxes should be abolished, Oregon's ties to federal government transit funding should be terminated, and publicly owned transit assets should be auctioned off. Stop any further spending on publicly owned urban rail systems."

Peter Samuel, editor of the self-published Toll Roads Newsletter, wrote a piece for the Reason Foundation which makes the case that one can build one' s way out of congestion. Samuel is a libertarian and an advocate of building toll roads and converting existing highways to toll roads as a solution to transportation problems. His past work includes writings for the Cato Institute promoting highway privatization, and he is also associated with something called the Sutherland Institute, and has joined the fray over Salt Lake City's light rail proposal, arguing that the absence of rail has been a reason for growth in the West.

 ***

 NOTE: No English-speaking nation has so fully embraced free-market / privatization solutions during the past 20 years as has New Zealand. This country's extraordinary shift from the far left to the reactionary right began in the Thatcher / Reagan era and has progressed steadily ever since. Anyone interested in the privatization issue would be well advised to look upon what has transpired in New Zealand as if it were a window into our own nation's future.  It is for this reason that I provide the following.  -Scott

 ***

CONFERENCE ON ENVIRONMENTAL JUSTICE AND MARKET MECHANISMS UNIVERSITY OF AUCKLAND FACULTY OF LAW

Over the past 15 years New Zealand has come to understand the benefits of applying market mechanisms to a large range of environmental problems. I would argue that those who promoted many of the radical reforms made in this country on both economic and environmental grounds have done far more to advance environmental goals than the environmental movement in general. The list ranges from the removal of subsidies for fertiliser, irrigation, land development and forestry, to market-related pricing and more efficient production of electricity and other energy products, to the individual transferable quota system for fishing. Currently there are proposals to manage roading on more commercial lines, including the use of congestion pricing, and to price and supply water on a similar basis. As on so many occasions in the past when environmental interests have been on the wrong side of the arguments, the Alliance Greens and others are resolutely opposed to the use of normal market mechanisms to allocate and price scarce resources like water...

The second issue that I want to discuss is the controversial suggestion that entry fees should be charged for national parks. This is clearly regarded by many environmental and outdoor lobbies in New Zealand as an outrageous intrusion on some god-given right.

Again we need to ask the question: what is so very special about the conservation estate? The right of access to a national park does not imply the right to take from taxpayers any more than it implies the right to damage the park. We pay for things far more important to us like food, clothing, transport and housing, and for activities like going to a concert or a sporting event. Given the small part entrance fees pay in determining the overall cost of visiting conservation areas, it is impossible to argue that charging an entry fee would be a serious barrier. The cost of getting to and from a park is likely to be much greater than any entry fee - in the case of North Island visitors to the South Island or overseas visitors, very much greater.

Conservation minister Nick Smith has suggested that since we do not pay entry fees for city parks, it would be illogical to charge fees for national parks. The Nobel laureate Milton Friedman answered this question many years ago in Capitalism and Freedom. Explaining the fundamental difference between a city park and a National Park he said:

For the city park, is extremely difficult to identify the people who benefit from it and to charge them for the benefits which they receive. If there is a park in the middle of the city, the houses on all sides get the benefit of the open space, and the people who walk through it or by it also benefit. To maintain toll collectors at the gates or to impose annual charges per window overlooking the park would be very expensive and difficult. The entrances to a national park like Yellowstone, on the other hand, are few; most of the people who come stay for a considerable period of time and it is perfectly feasible to set up toll gates and collect admission charges. This is indeed now done, though the charges do not cover the whole costs. If the public wants this kind of an activity enough to pay for it, private enterprises will have every incentive to provide such parks. And, of course, there are many private enterprises of this nature now in existence. I cannot myself conjure up any neighborhood effects or important monopoly effects that would justify governmental activity in this area.

The distinction between city parks and national parks which the minister has difficulty understanding is drawn in practice in many locations around the world. The major US and African parks charge for entry. Indeed, a recent opinion poll in the United States conducted by the National Parks and Conservation Association found that 80 percent of respondents supported charging entry frees for national parks, provided the money raised was spent on the upkeep of the park. And, of course, if they were not used for the upkeep of the park, they would not be a user fee - they would be a tax. The US-based Friends of the Earth released a report last year, Green Scissors 97, which cited that poll and urged higher fees for entry and usage of national parks.

***NOTE: Friends of the Earth no longer supports these recreation user fees and are today listed amongst the 306 groups OPPOSED to fee-demo at www.freeourforests.org/opposition.html -- Scott***

Friends of the Earth argued that it was an appropriate way to reduce the burden on taxpayers, to give park managers the right incentives to collect fees, to improve funding and maintenance of parks and to reduce environmental degradation. Such views are very different from the environmental socialism still characteristic of DOC and most New Zealand environmental groups - the Maruia Society being the most notable exception.

Free entry is a subsidy. The real resource costs of using national parks are then borne by taxpayers, through expenditure of public money, or other users, through degradation of the conservation experience. Those who do not go to the parks pay for those who do. And many of the payers are much worse off financially than many of the non-paying users - surveys have consistently shown that visitors are predominantly from above-average income groups. As is so often the case with government interventions, the implicit income transfers are from poor to rich.

The notion of charging for entry to wilderness areas would have seemed utterly daft to our predecessors in New Zealand. They were few, wilderness was everywhere. Scarcity of wilderness was not an issue; on the contrary, they judged there was too much of it. So they worked with a will, turning much of it into highly productive farmland.

But there are now far more of us, and far less wilderness. Scarcity of wilderness, and congestion of use, are now issues. As circumstances change, so must our actions. New Zealanders who use DOC facilities do not commonly argue against paying for them. New Zealand tourists are not offended at paying to visit national parks overseas. Nor would foreign tourists be horrified at returning the favour.

The reality of scarcity cannot be wished away - it can only be dealt with by the range of mechanisms available. The challenge is to choose the best mechanism. Again and again we find that prices are the best method for rationing scarce resources. This is not some perverse ideology or expression of greed as the minister of conservation suggested. The advantages of making more use of prices in the conservation setting are several:

. prices help gauge consumer preferences (much more accurately than other mechanisms such as surveys);

. consumers of services balance the benefits of using them against the costs;

. pricing curbs hidden cross-subsidies and therefore returns from lobbying activities;

. the deadweight costs of taxation are lowered;

. more revenue can be generated and resources directed to the production of whatever is being demanded.

Charging for access to public conservation areas also raises the market value of natural habitats. Private land owners (including Maori) will then have stronger incentives to supply conservation and recreational services - as at Tiritiri Matangi or Birdlands Sanctuary. At the moment, giving away publicly provided recreational services for free signals to private landowners that farming, harvesting or mining are the only things worth doing with their land.
Consider the main alternatives - rationing by queue or by politically determined rules. Queuing demands investment in time, an investment whose cost varies greatly from person to person. Our ability to devote time to queuing is not somehow more morally distributed than income. The time spent in queues is time wasted - it could be allocated to more productive or worthwhile pursuits. The opportunity to raise revenue is forgone with arrangements like the booking system which is proposed for the Abel Tasman National Park. Moreover, such arrangements are inconvenient for local residents who want to spontaneously seize the opportunity to walk at a weekend, or for those who wish to adjust the timing of a visit to weather conditions.

DOC is basically opposed to entry fees, partly on transactions cost grounds. This is a proper issue to raise and collection and enforcement costs will vary from park to park, and on a seasonal basis. However, DOC prefers to avoid an in-depth discussion of practicalities. It is odd that something which is eminently enforceable in South Africa, the United States and Australia is apparently felt by DOC to be beyond its capacities. Yosemite National Park has been levying visitor fees since 1913, Yellowstone since 1915. Kruger National Park in South Africa finds visitor fees of 15 rand for adults and 7.50 rand for children quite within its capacities. Or is DOC simply coming up with a convenient excuse to placate well funded and vocal environmental lobby groups?

It is perverse to deride suggestions that people should pay for the conservation resources they use, and then complain that conservation is underfunded by the political system, and undervalued by private landowners. This is an indication of shallow posturing, not serious intellectual grappling with the issues.

The obvious place to start would be to introduce an access charge for foreign tourists, with perhaps a lower charge for New Zealand residents. At the same time, hut fees should be set at levels which cover the full cost of the facilities provided. Foreigners are accustomed to such charges - hut fees are US$50 a night on parts of the Appalachian Trail, for example. Foreigners now account for around two thirds of the visitors on some of the Great Walks, and the number will grow as tourism increases. It would not be difficult to identify foreign and New Zealand visitors by requiring a passport, driving licence, credit card, community services card or some other means of documentation to be provided on entry into the park or, in the absence of any identification, within, say, two weeks of a visit. The idea that non-payers could be fined was ridiculed by some environmentalists, but in fact large fines are already applicable, for example up to $500 on the Milford, Routeburn and Kepler tracks for people camping overnight outside specified areas. DOC itself agrees that large fines could overcome most of the practical problems of charging for access. Priority in introducing such policies would be given to parks and walks where usage and the practicalities of collection justified the collection and enforcement costs.

In a juvenile response to the report, the minister of conservation rejected out of hand even the idea of charging foreign visitors. His extraordinary logic was that carrying passports was unacceptable, whereas most foreigners require one to enter New Zealand, and that overseas visitors pay GST, but they do so on local purchases regardless of whether they use park services or not. Other reactions differed. As one letter to us put it: "I heartily agree with the idea ... that we should stop paying a subsidy to foreign visitors who wish to see our natural heritage." Such a move seems unlikely in Dr Smith's term of office unless some of his colleagues insist on pragmatism instead of ideology, but the chances that the present policy will survive for many more years seem slim indeed. 

Comments (0) >>

Write comment

Show/Hide comment form

Name

Email

Title

Comment

Write the displayed characters

Add Comment