An overlooked side effect of ULEZ?

It is difficult for an economist to argue against the basic idea of the Sadiq Khan’s Ultra Low Emissions Zone (ULEZ) charge for taxing the more polluting motor vehicles entering London. After all, economists generally would suggest that we tax negative externalities, and that is said to be the rationale underpinning the ULEZ. The Mayor claims that the tax will curb vehicle emissions (CO2, particularly NOX, and also mentioned is particulate matter, PM2.5, from tyres and other moving parts of vehicles). As a consequence, lives will be saved, although both the figures and the verification procedure justifying them have been hotly disputed.

Controversy has also arisen because the original ULEZ zone dating from 2019, a central zone that garnered relatively limited opposition when the charge was first applied, has, since the end of August, been extended to the whole of the capital coming under the mayor’s jurisdiction. This is roughly the area encompassed by the M25 motorway. The extension is huge, covering metropolitan suburbs and incorporating residential areas occupied by some relatively poor home owners more likely to own older petrol and diesel cars that fall foul of the scheme’s extension. It also captures of course those motorists living outside of London who drive into the zone to work, play or shop, again some of whom are not necessarily wealthy. For those residents of London owning an offending vehicle there is the palliative of a subsidised scrappage scheme offering a basic £2,000 for crunching a non-compliant car.

Distributional issues aside, the basic economics of what has been implemented are relatively sound. Whether the charge is pitched at an appropriate level is a different matter. And a complicated matter because motorists also impose another externality, this time associated with traffic congestion, and a specific charge for this applies only to a small central area of London. Arguably, the ULEZ acts also as a proxy charge on road congestion for areas lying outside the centre and this has been alluded to in TfL material. But, putting such detail aside, completely overlooked is a significant anomaly when implementing an emissions charge on a particular part of the transport sector.

Consider first the probable short term behavioural reactions to the extended ULEZ. There will be fewer total journeys both into and within the ULEZ zone, but probably not a great deal fewer. Nevertheless, one hopes that the economic consequences of this reduction was considered during the decision process. Other journeys that were by car will have become instead extra journeys on London’s buses and underground and a few more on overground rail. This modal shift, as it is called by the transport planners, will slightly ease road congestion (an added plus) but will increase loadings and thus crowding on public transport, a disadvantage, or to use economics jargon, a disbenefit. Whether benefits offset disbenefits I will leave others to try to calculate but let us presume it is a score draw when it comes to balancing longer journey times and the discomfort of riding more crowded public transport, against the benefits of slightly less congestion on the roads.

So far so good for the ULEZ scheme. But now the downside. Some of the modal shift, as noted above, will occur because of additional ridership on London’s Tube system, much of which is underground, a characteristic, of course, giving the system its moniker.  And there lies a problem that seems to have escaped the attention of most of the media. Parts of the Underground suffer from serious air pollution, discovered following research in 2019 sponsored by the Financial Times. According to the newspaper, the deep Tube is by far the most polluted part of the city because of considerable particulate pollution from metal friction, clothing fibre, and dust in general trapped in the tunnels. And there is a lot of it. Using hundreds of measurements inside carriages within Zone 1, dangerously high levels of pollution were found, particularly on the deeper lines. All the deep lines (Piccadilly, Jubilee, Bakerloo, Northern, Victoria and Central) had particulate PM2.5 levels at least five times higher than the World Health Organization’s safe limit and much higher than average levels on the surface, (generally less than PM1.0) particularly in outer London.

The extra ridership on the Tube due to the ULEZ is no doubt tiny compared with daily numbers using the network; this number, about 5 million people a day, is equivalent to more than half the population of the capital. Tiny the extra numbers may be, but these transferees from road vehicles will have their health risk increased as a result of the ULEZ-induced modal shift. Whether this was considered when calculating the statistical numbers of reduced deaths due to the scheme is unknown, but it is by no means apparent that it was considered.

That leaves a larger issue of the health of regular riders of the London Underground. Using the mayor’s rationale for the ULEZ scheme, should not a similar additional charge be introduced for use of the deep level Tube? At the very least, until it can be shown that action has been taken to reduce PM2.5 to acceptable levels, the mayor should restructure and rebalance public transport fares, reducing those on his managed bus system and the surface running outer tube/overground services, whilst hiking fares for the deep running lines in Zone 1 and 2. A consistent, rational public health approach requires it, and particularly if the mayor is to avoid  accusations of being anti-motorist.



David Starkie is on the Executive Board of the Journal of Transport Economics and Policy. Expressed here are his personal opinions.

18 thoughts on “An overlooked side effect of ULEZ?”

  1. Posted 11/10/2023 at 12:44 | Permalink

    If you want to internalise externalities you can’t just pick on the things that Khan hates. He hates other people having motor transport.

    Why not apply the externalities principle to immigration. It imposes huge downsides on the pre-existing polulation. The newcomers have very little cash and generally do not earn enough in their lifetimes to fund the infrastructure and social costs they generate. As aresult either the popultion has to queue (which has costs over and above the opportunity cost of time), they forgo activities they wanted to do or they pay to increase supply.

    Their payment for additional supply might be they go private, they drive instead of using public transport. It may be that the state builds the additional infrastructure which we pay for because the newcomers have no cash; this is rare, usually the state does not increase capacity so the costs of queueing or forgone activities is the general outcome.

    The article also fails to discuss the best way of internalising external costs. It fails to evaluate the cost of the alleged damage: is it CO2 that is the problem and should be taxed or is it NOX or particulates. These should be evaluated as we cannot ever live in a danger free environment. How about taxing tube users for adding to demand got trains which generate and distrinbute the harm underground.

    How about seeking to internalise the costs of NOX and particulates. Instead Khan seeks to raise cash. What right has the London Mayor to this money. Why should the state think it right to make a cash grab every time it imagines or discoveres a problem – maybe those with respiratory disorders should receive all the extra cash.

  2. Posted 11/10/2023 at 12:47 | Permalink

    If you can’t tell the difference between an annual average (WHO limit) and a spot reading (FT data) then you’re just another innumerate arts graduate, out of your depth, commenting on stuff you don’t understand – just like the original FT journalists.

  3. Posted 11/10/2023 at 12:57 | Permalink

    The ULEZ charge system is very expensive to run compared to the number of vehicles it actually affects and the likely revenue collected. That is a sound economic reason to reject it.
    It will disproportionately affect the poorest – those driving old beaters – who are the least able to pay. That is also a sound economic reason to reject it.
    Significant amounts of particulate pollution come from tyres and brakes. The heavier the vehicle the more tyre and brake dust it gives off. Newer vehicles are heavier than older vehicles, and EVs the heaviest of all. But ULEZ instead taxes the older lighter vehicles. That is a sound reason to reject it.

  4. Posted 11/10/2023 at 13:29 | Permalink

    ULEZ means my family and I will never go to London again while khan is in charge. At least a trip a month and several hundreds pounds each time. No More. Coastal cities and the home counties for us from now on (Last 6 months actually). We are not alone.

  5. Posted 11/10/2023 at 14:00 | Permalink

    You also overlook that many tradesmen will continue to use their non-compliant vehicles and simply add an ULEZ surcharge to their bills.

  6. Posted 11/10/2023 at 14:16 | Permalink

    There are many grounds for arguing that ULEZ expansion is a bad idea, but I don’t think David Starkie’s article is one of them. He rightly points out the appallingly high levels of pollution in deep level stations, but his exposé of an apparent overlooked consequence of ULEZ expansion appears to be based on a false argument. As 55% of the route mileage of the underground is “above ground”, nearly all of which is in the ULEZ expansion area, any modal shift to public transport won’t lead to those passengers suffering increased pollution because the shift would be in the open air, where it’s fair to assume the air is healthier. Besides, given that public transport lines are few and far between in the suburbs, the modal shift to tube trains is likely to be minimal if non-existent.

  7. Posted 11/10/2023 at 18:49 | Permalink

    I think the argument (use of Tube is more of a health risk, etc.) is valid of further investigation and the economic consequences of ULEZ are certainly worth monitoring as we know that greater economic benefit and less deprivation is better for public health overall. However, the comparison re. air quality (street level v Tube) will need to consider that people live and are at street level most of the time but on the Tube for short occasions only and this will likely show the modal shift is a public health benefit.

  8. Posted 11/10/2023 at 19:00 | Permalink

    Congestion isn’t really an externality. Road users suffer from it roughly in proportion to how much they contribute to it.

  9. Posted 12/10/2023 at 11:12 | Permalink

    A nice argument except, of course, that much of the opposition to the extension of ULEZ was because of the absence of public transport alternatives, especially the Tube, in the outer suburbs. Not much of a modal shift to the Underground in Bromley.
    This doesn’t detract from the failure of the Mayor to address air quality on the Underground or the widespread feeling that the ULEZ extension was an act of spite rather than a considered public health exercise.

  10. Posted 12/10/2023 at 11:58 | Permalink

    The elephant in the room that no one wishes to address that would have the biggest impact against the reduction in use of all private motor vehicles at the times of day when the most damage is done by all motor vehicle use is between 7.45 and 9.30 am, and 2 and 4pm when kids are being dropped off and picked up from schools in private vehicles. If this was banned the polution reduction and congestion around schools would be slashed. Also it would give kids a great work out before school, and allow them to get their chatter and some excess energy out of their systems before and after school, a win win for all concerned. From an air quality and road safety perspective, its a no brainer, and this should have been the obvious first stepping stone in the clean up policies. The politicians would never promote this aspect of traffic management as it would be hugely politically unpopular, and bring no finances into the public coffers. Just saying.

  11. Posted 12/10/2023 at 15:29 | Permalink

    It’s just another tax on us car drivers i can’t afford another car so I have a 2009 diesel we was all told 2 buy now I’m paying £60 odd a week when I only earn about £80 and the 2000 that was on offer was a joke if I can’t afford to pay it fuck it you can have my car when it’s in flames

  12. Posted 12/10/2023 at 16:44 | Permalink

    Rip off Britains.

  13. Posted 12/10/2023 at 17:10 | Permalink

    It’s not about pollution. It’s about raising money for TfL. Read daylight robbery, it’s been done many times over history. The other options were a rise in council tax or a London wide congestion charge. Neither of which would wash.

  14. Posted 12/10/2023 at 17:23 | Permalink

    Its amazing to read and listen to so called experts. Reality is no one is tackling the real issues of pollution.
    Why do we have incinerators in the ULEZ area.
    Why do we have airports and planes flying over London.
    Why are we building more homes.
    The real truth is nobody cares, least of all people in power.

  15. Posted 12/10/2023 at 21:30 | Permalink

    “should not a similar additional charge be introduced for use of the deep level Tube?”

    What twisted thinking is this? The ulez charge is because the driver is causing pollution. Why on earth would you charge someone extra on top of the normal fare for using the tube if it is indeed polluted?

    It’s already pointed out that that study was questionable in the first place. Has there ever been any evidence over the 160 years of operation of excess illness or deaths among even the drivers or staff, the people who might be supposed to be exposed to this pollution most?

    Could you not wear a mask for the short time you’re on the tube if you’re worried? After all, there are overground alternatives if this doesn’t work for you.

    This just seems to be part of the anti-ulez brigade’s usual random moaning about what we now know to be a completely justified, democratic and legal policy.

  16. Posted 13/10/2023 at 09:32 | Permalink

    Co2 does not contribute to air pollution. Particulates from tyres and brakes is worse for EVs because they are heavier. Very poor article.

  17. Posted 13/10/2023 at 12:44 | Permalink

    I agree with Andy. By Starkie’s logic, pedestrians should be penalized for walking on polluted pavements.

  18. Posted 13/10/2023 at 17:23 | Permalink

    This review completely forgets cycling (and walking) as other options to driving, (including e-bikes), something which the mayor has been promoting as an alternative.
    Yes, true, that the underground has poor air quality. All the more reason to address this also.
    Avoiding the Underground is one reason why I prefer to cycle when in London.

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