Pollution and Congestion in Urban Areas: The Effects of Low Emission Zones

Abstract

The great weight that the car has as a means of mobility in large cities generates significant negative externalities both in terms of pollution and congestion. The goal of this paper is to examine the effectiveness of low emission zones (LEZ), which are being implemented extensively in Europe. First, we extend the theoretical framework on urban tolls used in de Borger and Proost (2012) to analyze the effects of LEZ. Then we perform an econometric analysis taking advantage of a unique and extremely original panel of large European urban areas over the period 2008-2016, using data on congestion from TomTom and data on pollution (PM2.5) from environmental sciences. We conclude that LEZ abate pollution, especially in severely polluted cities. Instead, they are ineffective in mitigating congestion. This is a very relevant result, given the growing importance of LEZ in Europe.

Keywords: pollution, congestion, low emission zones, urban tolls, urban areas

JEL Classification: D62, H23, L92, R41