Policy: London

Policy Objectives

On February 17, 2003, the London congestion charging scheme came into effect. The primary driver behind introduction of the congestion charge was that London experienced among the worst traffic congestion in Europe costing between 2 - 4 million GBP per week in lost time (TfL, 2007a) (EEA, 2008). The charge was implemented to meet the following key objectives:

• Reduce congestion;
• Make radical improvements to bus services;
• Improve journey time reliability for car users;
• Make distribution of goods and services more efficient (EEA, 2008).

Policy Structure

The original scheme covers a 22 square kilometre area, bounded to the east by the London Inner Ring Road (Figure 3-1). The congestion charge zone nearly doubled in size on February 19, 2007 encompassing a large section of west London. The original charge was £5 increasing to £8 in July 2005. Residents within the designated congestion charging zone receive a 90% discount with discounts available for regular and business fleet users. The Mayor and Transport for London (TfL) are responsible for the establishment, operation and enforcement of the scheme. Revenues are reinvested back into transport projects in London (Veitch and Bakir, 2007; EEA, 2008). Charges are assessed once per day, thus vehicles enter or leave the zone freely without incurring additional charges. The scheme is enforced by a network of automatic number plate recognition cameras that record all vehicles entering or exiting the zone. Vehicle number plates are read and registration marks stored on a database; drivers must register their vehicle registration mark on the database either before or just after entering the zone. At the end of each 24-hour period, the vehicle registration data held in the database is cross referenced against vehicle registration data collected from drivers known to have paid to enter the charging zone (EEA, 2008; Noland et al., 2008).

Exemptions from the scheme include residents living within the zone, buses, licensed taxis and mini-cabs, emergency services vehicles, certain military vehicles, certain NHS vehicles, vehicles for disabled people or institutions for disabled people, bicycles and motorcycles. A small number of cleaner, lower-carbon vehicles are currently entitled to 100% discounts. This discount scheme potentially gives incentive for the uptake of cleaner vehicles. Although, only anecdotal evidence exists to suggest that the congestion charge has influenced vehicle purchasing behaviour. Nevertheless, Honda and Toyota planned to increase their supply of hybrid vehicles during 2007 (Veitch and Bakir, 2007; EEA, 2008; Noland et al., 2008).

Implementation & Operation

Implementation costs for the London congestion charging scheme were approximately £162 million for infrastructure and human resources. Operating costs over the four years are £289 million with a total income of £592 million creating net revenue of £303 million. Since the scheme was implemented actual revenues have been much lower than expected nevertheless, the initial investment could be regained in five years. This implies that implementation of a congestion charge in a large urban centre such as London is cost effective (EEA, 2008).

Figure. 3-1 Area map of London Congestion Charging Zone 2003 -2007

Source: TfL, 2006 in EEA, 2008

Major Impacts

There is a degree of public and professional consensus that the scheme has been ‘a rare transport policy success' in terms of reducing congestion and related vehicle emissions (Sherrington and Moran, 2007). For example, average traffic speeds increased initially from 13- 17 km/h, translating into a reduction in congestion delay of 30% compared to 2002 levels (TfL, 2003). Overall congestion reductions have remained at about 30%, however, delay in all of Inner London has increased slightly to 1.5 min/km from 1.3 min/km. TfL (2006) attributes this to other changes in the network which have reduced motor-vehicle capacity (such as providing for bicycles and pedestrians). Within the charging zone delay has reduced to 1.7 min/km from 2.3 min/km (Noland et al. 2008). As a result, TfL (2007b) reports that two thirds of Londoners feel the charge has reduced congestion or left conditions no worse than before it was introduced in February 2003, while 9% think conditions have worsened. After 5 years, public opinion has turned steadily in favour of the scheme where the percentage opposing decreased from 72% to 36% (Blow et al., 2003)

Transport for London (TfL, 2003) estimates that car movements decreased by 30%, van and lorry by 10% and overall traffic entering the zone reduced by 18%. At the same time movement of other modes increased particularly motorcycles (6%) and bicycles (28%) between Spring 2002 and Spring 2003 (TfL, 2006; Noland et al., 2008). From 2005 there was a further decrease in traffic entering the charging zone of 3%, attributable to an increase in the charge (TfL, 2006). Bicycle traffic has increased further but shows signs of stabilizing and the large initial increases in motorcycles have declined by 12% between 2004 and 2005 (TfL, 2006; Noland et al., 2008). The first year also saw a 37 % increase in the number of passengers entering the charging zone by bus during charging hours (EEA, 2008; Noland et al., 2008).

Reductions in CO₂ emission can be attributed to less traffic within the charging zone and reduced congestion levels resulting in more fuel-efficient driving conditions. Transport for London estimates that traffic and speed changes observed within the zone have led to a 16.4 % reduction in CO₂ emissions (Table 3-1). Small increases in traffic flow were observed on the inner ring road suggesting a proportionate increase in CO₂ emission (TfL, 2007; EEA, 2008).

Table 3-1. Principal changes to emission of CO₂ percentage change in 2003 compared to 2002

Source: Adapted from TfL, 2007b in EEA, 2008

Table 3-2 shows the reduction in vehicle km travelled and fuel consumption per year for both the 5 GBP and 8 GBP congestion charging zone entry charges.

Source: Adapted from Evans, 2007 in EEA, 2008

Air Quality - Table 3-3 shows principal changes to emissions of NO_X and PM₁₀ within the charging zone and on the inner ring road between 2002 – 2003. Within the zone NO_X decreased by 13.4 % and 15.5 % on the inner ring road. PM₁₀ decreased by 6.9 % within the zone and 6.8 % on the inner ring road (EEA, 2008).

Table 3-3. Principal changes in emission of NO_X and PM₁₀: percentage change in 2003 compared to 2002

Source: Adapted from TfL, 2007b in EEA, 2008

The congestion charging scheme was part of a wider program of transport investment undertaken by the City of London. Increased investment into public transport infrastructure has likely contributed to the relative success of the congestion charge. For instance, in Transport for London’s (TfL, 2005) five year business plan an additional £10 billion was allocated for investment. This included investments for train, track and signal upgrades, approximately £149 million for safety improvements, £166 million for improvements in walking and cycling infrastructure and increased bus services that would meet EURO II emission standards by the end of 2005 (TfL, 2005).

Latest Reforms

An emissions related congestion charge is under proposal for the City of London as part of the Mayor’s Climate Change Action Plan (AEA, 2007). For cars registered since 2001, the proposed Congestion Charging bands are as follows:

·       Vehicles emitting 120 gCO₂/km or less (equivalent to Vehicle Excise Duty (VED) bands A and B) and that comply with the Euro 4 air quality emissions standard would be eligible for a 100% discount (the low CO₂ discount).

·       Vehicles in VED bands C-E, or in band F that emit between 121 gCO₂/km and 225 gCO₂/km would be liable for the standard charge of £8.00. Additionally, cars in bands A and B that do not meet the Euro 4 emissions standard would be liable for the same charge.

·       Vehicles in VED band G emitting over 226g/km CO₂ are subject to a £25.00 charge. Band F cars emitting over 226 gCO₂/km first registered with the DVLA on or after 1 March 2001 but before 23 March 2006 would also be liable for the higher charge (AEA, 2007).