Hi Freddie,I posted some thoughts earlier today in a higher up part of this threat which you may have missed, arguing that the ULEZ is quite an effective tool for what it aims to do. Just copying it below in case you haven’t had the chance to read it.I think you’re right to point out that the ULEZ is not a perfect system and it will create certain side effects like increased traffic on the edges of the zone. I think the disappointing reality is that any system of government interference will be characterized by a degree of such undesirable side effects. To me it does not detract from the fundamental principle of the ULEZ as being an effective tool of pricing a negative externality, as well as speeding up the car replacement cycle.I don’t think tracking per mile is currently feasible as it requires monitoring systems on every street corner, which London currently does not have.A higher fuel charge could be a good idea but only works at a regional or national level, given that incentivizes people to buy fuel outside the zones of influence of the London authorities. Compensation for low income people is an income inequality matter which is fair to point out, but a small detail in the grand scheme of things.On your point of hitting consumers, these will always be the ones to pay for it. Commerce is a mere conduit as it passes on costs to end consumers, assuming it has pricing power over consumers. The principle remains that those who are causing the pollution are required to pay for it. Whether that is me driving a car, or me buying a product that is driven into Central London by van does not matter.In economics, Henry Sidgwick introduced the concept of “externalities” over a century ago. A negative externality is an economic activity that harms an unrelated third party, such as our broader society. Air pollution is one of the clearest forms of a negative externality. If I drive a polluting car through your street, your children will inhale toxins without having any relation to me or my driving. Other examples are nuclear waste, water pollution, or overfishing. Richard has shown the severity of air pollution in London. So unless you wish to debate these statistics and take up the view of climate change deniers that sadly are still amongst us in powerful places such as the US Presidency, the question then becomes to what extent the ULEZ regulation is an effective tool in countering the negative externality of air pollution.In principle the tool is extremely effective for two reasons. First of all, it puts a tax on those who pollute. Secondly, it incentivizes owners of cars to replace their current vehicle for a less polluting one. I myself have just traded in my Euro 5 diesel for a ULEZ compliant car as I need to drive through Central London occasionally. Given cars on average last 13-15 years, the question of how to speed up the car replacement cycle towards newer combustion engines and hybrid/electric vehicles is an important one.So then the final question is what the right price to put on the air pollution externality is. If you say that this is the most important thing in the world, then you might argue for an outright ban on combustion engines. That would force replacing the c2.6mln cars in London for electric vehicles, which at a price of c£50k implies a total cost of £130 billion. Apart from the fact that there is insufficient supply of electric vehicles today, those costs would arguable be too much to bear for Londoners.The gradual introduction of the ULEZ is therefore an attempt to price a serious societal externality, whilst not putting an unbearable liability on car owners and charging only those people that are the root cause of the issue. In that sense I think it is a great rule. It is time we recognize the importance of environmental pollution and accept our responsibility to pay for it.
Sjoerd de Koning ● 2772d