Environmental effects of the London Congestion Charge: a regression discontinuity approach

Abstract

This paper aims to evaluate the causal effect of the London Congestion Charge on the level of pollution. To this end, we have assembled a unique dataset. This consists of daily observations, concentrating on eight pollutants: CO, NO, NO2, NOX, 03, PM2.5, PM10, SO2. By using a regression discontinuity design in time series; with thresholds centered on the dates of the introduction of the charge and of the beginning and end of Western Expansion, a negligible and adverse impact of the charge is documented. When a spatially disaggregated model is estimated, it emerges that the road pricing scheme has induced a decrease in the concentration of NO, NO2 and NOX in the charged area and an increase in surrounding areas. A general deterioration of pollution concentration is found in the case of 03, PM2.5, PM10. These results are consistent with an overall increase in traveled kilometers, due to traffic diversion from the charged to the uncharged area. Furthermore, there is an unclear, possibly adverse, impact of increased speed on pollution.