Congestion Charging

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Alan Jumaily 9th December 2003

Congestion Charging

1. The congestion charge was put into place to correct a number of failures. One of the main failures without the congestion charge was that there were a number of negative externalities involved with congestion in Central London. A main external cost was that the number of cars in the area led to a very high level of pollution. This had negative effects on the whole economy in London. People would avoid London in terms of things like shopping because of how bad the pollution was and they would stay in the shopping areas of where they live. Also, this pollution leads to respiratory illnesses such as asthma and this costs the NHS a lot of money each year at the expense of the taxpayer. It also costs the economy in terms of days lost by workers due to all of these illnesses and over a period of time, these costs can really add up.

Another negative externality is that with increased congestion come longer journey times. A study showed that the average journey time from different points in London were 45.9 minutes before the congestion charge.