The issue of road pricing has been simmering in the background of the environmental debate for many years and has, this month, gained greater prominence with the publication of a draft version of the Road Transport Bill that will allow local authorities to run pay-as-you-drive trials in their local areas. A number of local authorities will be interested, though all will be wary of the policy given the recent petition on the Downing Street website against road pricing that got nearly two million signatures! London Mayor, Ken Livingstone, has meanwhile extended the reach of the London congestion charge with his plans to create a low emission zone (LEZ) in the capital and charge more for older, and therefore dirtier, vehicles to enter the zone.
Draft bill starts Britain down the road to pay as you drive Guardian (21/5/06)
Livingstone to charge older, dirtier lorries £200 per day Guardian (8/5/06)
|1.||What are the external costs and benefits resulting from increased use of the roads?|
|2.||Discuss the extent to which the policy of charging more for older, dirtier vehicles is likely to reduce the external costs of driving.|
|3.||Using diagrams as appropriate, show the likely impact of pay-as-you-drive schemes on the social equilibrium in the transport market.|