6 March 2009

Urban taxes: pro or against?

More and more cities in the world begin to reduce the systematic use of car in their centre. The principle of urban tax has been set up 40 years ago by the American economist William Vickney (honoured with a Nobel in 1996) There are 3 types of urban taxes: - The area urban tax like in London where you have to pay to drive in it - The cordon urban tax like in Stockholm where the entrance of an area is rated - The axis urban tax where you have to pay for using an axe or an infrastructure The first cities to apply the area urban tax are Singapore, Oslo, Trondheim, Bergen and London.

‘London congestion charge’

‘If the city of speed is the city of success, as Le Corbusier proclaimed, London is a resounding failure’ Anthony Hoethe, ROAM, 2003.

In London, the ‘Congestion charge’ has been settled since 2002 to fight against congestion, which clog up roads, threatens businesses and damages London’s status as a thriving world city.
This charge is applied from Monday to Friday for the inner city and each way in the area cost 8 pounds.
As a result, the traffic has been reduced by 21% and cycling increased by 46%. 123 millions of pounds have been collected with this tax in 2006/2007 and reinvested in public transport.
But this system also has its proper limits. First of all, it’s a really expensive system. In London, the CCTV system which automatically check the vehicle registration number cost 170 millions each year and the global network installation has cost 300 millions of euros. Moreover, the problem of pollution further rejected outside the area is an important question that hasn’t been resolved yet. This kind of tax also questioned the inhabitant’s equality. The rich people of city centre are more able to pay this tax than suburb people. And it’s seems to be not really an ecological issue because it’s supporting in a way the firms to bought a right to pollute in the inner centre. The impacts on the economy for the service sector and small shops in the taxed area is not well know at the moment. According to Marcel Robert (‘Pour en finir avec la société de l’automobile’) public opinion investigations realised in the city concerned by an urban tax shows that people are generally against it before the application but most of them change their point of view several month later.
As an example, an experiment of 6 month in Stockholm for the urban tax has been well accepted by the inhabitants who approved at 53% the permanent settle of this tax. (Novethic)

Carbon emissions taxes

A 'CO2 charge and CO2 discount in the Low Emission Zone' must have been settled in February 2008, decided by the previous mayor of London Ken Livingston. But the new mayor Boris Johnson has cancelled this tax. He arguments that owners of vehicle emitting the highest level of CO2 (226g/km and above), such as large family cars, would have paid 25£ a day to drive in the central London Congestion Charging zone and this scheme would have cost 10m £ to TfL* to implement. But all residents who are registered with TfL for the 90 per cent Residents’ Discount will continue to receive a discount, regardless of their vehicle’s CO2 emissions.
Since 2007, some borough like Islington and Hackney applied the parking permit price, which is reflecting the amount of carbon that vehicles emit.
This system that taxes the most polluted cars aimed to encourage people to choose low carbon emissions vehicles.
In France since 2005, an ecological vignette has been settled. The price is increasing by 2 euros by Carbon grams for cars that emit more than 200g and by 4 euros for vehicles under 250g. But this tax is effective only for very polluting vehicle, which represent 8% of cars.
In Germany, 8 communes of Bade-Württemberg have joined Berlin, Köln and Hanover in their fight against small particles. Some ‘ Umweltzonen' (environmental areas) mostly dense and especially concerned by pollution are only accessible by cars which have a green vignette corresponding to minimum carbon emission rates.
But is this kind of tax really aimed to reduce carbon emission or help the car industry to sell new cars?

TfL*: Transport for London

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