Sample Economic Essay Paper on The Case Study of London’s Congestion Charging on Motor Vehicles Traveling

The Case Study of London’s Congestion Charging on Motor Vehicles Traveling


The various environment policies that have put in place are deemed to reduce the cost of environment conservation and help increase the investment levels regarding the infrastructure.  As it stands, the current policies have tried to achieve these two goals and in most cases have succeeded.  In the United States, there was the policy on the congestion of vehicle in the commercial areas of the major cities and towns.  The congestion fee was raised to be around $ 10 which every driver was supposed to charge at any one point when there is congestion.  This paper looks at the pros and the cons of the inception of this type of policy with keen concern on the cost-benefit analysis of the same.

The discussion

In the societal context, air pollution has far-reaching environmental effects both on the productivity and the efficiency in the conservation of the environment.  Before the imposition of the congestion fee, the vehicles are expected to throng the cities and major towns because the cost of owning a car nowadays is very less.  The congestion is deemed to bring on board far-reaching environmental pollution that is considered to cause unprecedented costs.  If the congestion policy is put in place, the transcending effect is that the congestion is expected to reduce and hence to lessen the amount of toxic gases being emitted into the air. Various costs are deemed to be saved if the congestion is not seen.  Some of the expenses that are considered to be reduced are the healthcare costs for which we expect that the number of patients due to environmental pollution is believed to reduce.

 A closer look at the real cost of the burden that shall have been carried off by the people and the government would be the healthcare costs.  This cost is reduced by the fact that the level of pollution shall have reduced. The externality that could have been transferred to the public shall have been reduced considerably. As we all know, the various environmental pollution is always caused by the emission of toxic gases in the air.  The emissions are expected to reduce. The reduction of the toxic gases in the air which human beings breathe creates some decrease in the contraction of diseases for various individuals.  The reduction of environmental pollution illness will reduce the overall cost of healthcare.  In this stance, the burden caused by the externality brought in by the users of the vehicles shall have been transferred to the rightful owner. The regular citizen will now not be affected by this cost.  In the societal context, there is a very stringent relationship between the society and the company producing the vehicles. The production of the vehicles usually produces toxic gases that have a high tendency of increasing the advent of infection among the various individuals in the society. The burden of externality, in this case, is transferred to the public and therefore it is not borne by the person who causes this pollution.  This notion is tantamount to economic burden to the society.

The introduction of the congestions charge has various benefits.  One of these benefits is the increase in revenue to the government.  The government in this stance can give much attention to the real advents of development that would ensure that the infrastructure is well catered.  The inception of the tax will also guarantee the collection of the funds that would be used in making sure that the final consumer has the right deal of healthcare in the country.  The development of roads and bridges are also one of the vital areas that would be looked into. When the efficiency in the elaboration of the transport network is up to date, the various issues that surround the notion of unprecedented congestion will be scrapped out.  The removal of this congestion in the major cities and towns will be removed by the use of two distinct avenues.  One of them is the notion of tax charge being levied on the congested zones. This concept is deemed to discourage various parties who in this case will be in a position not to visit town using their cars anyhow. Additionally,  the money got from the proceeds of the tax charged on the congested zones are deemed to be used for development and expanding of various roads which would be employed in making sure that the city is passable by the building of many ways that can allow the vehicles to pass with congestion in any way.  Because of these reasons, it is evident that the inception of policy on congestion charge will be very critical in reducing the instances of congestion in the areas concerned.

 A closer look at the policy on the congestion charge, it comes out clearly that the cost is deemed to be commensurate with the type of car in the congested area.  Most companies have strived to ensure that gases that the car produces do not affect the toxic levels in the air.  For these types of vehicles, their charge is deemed to be quite small than those who are not fitted with such gadgets. It is now the responsibility of the owners of the car to ensure that their vehicles are equipped with the right environmentally friendly devices to reduce pollution.  Economically, the demand for the car will shift from those companies who are fixing these gadgets into their cars before the sale from those who do not do this act. Accordingly, there will be high level of discipline in the implementation of the safety rules since the final consumer also has an informed decision on the right model of vehicle to make when buying the car.  The transcending effect of this notion is that the last user will be keen to reduce the economic burden levied to them through appropriate buying of the various cars and also make sure that they limit their going to town especially during peak hours of the day. This notion will also encourage them to use other forms of transport which are environmentally friendly such as the bicycle and the electric train.  These forms of transportation will help reduce the cost of fuel used and also the cost of health through the reduction of toxic gases into the air.  Additionally, on the health concerns, the riding of a bicycle to work reduces the chance of one having health problems which in turn will help the individual live healthy hence prolonging their lives.

On the contrary to this positive comments brought forward, there is need to look into this policy in a more classical way. If the final consumer who is the care owner is charged congestion levy, we expect their income to reduce.  The reduction in the income would mean that they would lack some amount of money to save and hence their savings will reduce and hence reducing the amounts of money available for investment in the economy.  The transcending effect of this scenario will be that the living standards of the final standard consumer shall have been derailed the more. It is to this effect that I highly recommend that the levy should be imposed on the vehicle manufacturers and the cost of fitting the environmentally safe gears in their product to reduce the advent of congestion. Additionally, the cost when the cost of pollution is transferred to the original producer, the incidence of tax charge will not affect the final consumer because of the competition that the vehicle industry would bring. This means that the tax burden will borne by the company producing the car product.  For them to reduce the production cost, the companies must improve their efficiency and the effectiveness of delivering a high-quality work to compete favorably in the market.  With this set of thought in mind,  it is very imperative to inculcate also the stringent policies that would require the automobile companies to fit the environmental safety guards into these vehicles before they sell them.


In a nutshell, the system of the congestion charge is imperative in bringing down the cost of air pollution during the heavy traffic in the cities.  Moreover, it is very imperative to note that this charge apart from generating revenue, it will discourage people from using the vehicle to town thus reducing the advent of air pollution.  The cost of the burden that this policy reduces is the health costs. Lastly, the implementation of this policy will ensure that individuals use other forms of transport that are quite environmentally friendly.