Green, Colin and Heywood, John Spencer and Navarro Paniagua, Maria (2018) Did the London Congestion Charge Reduce Pollution? Working Paper. Lancaster University, Department of Economics, Lancaster.
Abstract
We examine the London congestion charge introduced in 2003 and demonstrate significant reductions in a number of pollutants relative to controls. We even find evidence of reductions per mile driven suggesting amelioration of a congestion externality. Yet, we find a robust countervailing increase in harmful NO2 likely reflecting the disproportionate share of diesel vehicles exempt from the congestion charge. This unintended consequence informs on-going concern about pollution from diesel based vehicles and provides a cautionary note regarding substitution effects implicit in congestion charging schemes.