Economic-and-Social-Impacts-of-ULEZ

3 © Centre for Economics and Business Research 1. Introduction and summary 1.1. Introduction This is a report on the economic and social impact of the proposed extension of the London Ultra Low Emissions Zone (ULEZ) in August 2023 There are three elements to the study. First it examines the impact of the existing ULEZ scheme for cars and vans. Then it analyses the relevant differences between the area for the expanded scheme and that of the existing scheme. Finally it considers the overall economic and social impact. 1.2. Summary The key points of the study are: The existing ULEZ has an impact on the London economy – we estimate the costs to businesses and consumers are £253 million, though as part of that (£169 million) is revenue for TfL, in economics terms the economic cost (the deadweight loss to consumers and the admin costs) is £199 million. Scaling from this we estimate that the Proposed ULEZ has an additional revenue impact of £369 million. This means that the total Proposed ULEZ scheme (i.e. both the current scheme and the proposed scheme) has a revenue cost to consumers and businesses of £538 million. If in addition the economic costs to users are included the total cost rises to £807 million. Using a different measure, which discounts the revenue costs because they represent income to TfL but also includes their admin costs, the total economic cost of the scheme is £569 million. Moreover these calculations only estimate the direct effects. Since the impact of the Proposed ULEZ on vans is 4.5 times that of the existing ULEZ and hence essentially on business activity, it is likely that the Proposed ULEZ has additional indirect economic effects which we have not taken into account, and that for the extended scheme these could be quite substantial.

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