Air pollution and urban road transport: evidence from the world's largest low-emission zone in London

Low-emission zones (LEZs) have been implemented widely in Europe to tackle air pollution sourced from vehicular emissions. We quantify the effectiveness of the world's largest LEZ-London's LEZ-in reducing its target pollutant, PM10. Using a difference-in-difference (DID) framework, we find that the least stringent phase I of London's LEZ induced a short-term increase in the roadside PM10 within the zone by about 14.8%, whereas the longer and more restrictive phase II significantly drove down the PM10 by 5.5%. We explore the underlying reasons behind the disparity in policy effect across stages. We show that upon the introduction of phase I, the traffic volume of targeted heavy goods vehicles (HGVs) and temporarily exempted light goods vehicles (LGVs) has substantially increased, outweighing the environmental effect of a higher proportion of greener vehicles. We provide possible behavioral explanations for this phenomenon.