Policies to reduce pollution and congestion in urban areas: urban tolls or low emission zones?

The heavy reliance on cars as a means of transport in large cities generates significant negative externalities in terms of (local) pollution and congestion. Our analysis, based on a sample of 130 large cities in 19 European Union countries and the United Kingdom, reveals the following results.

• Average pollution levels in most cities exceed the threshold set by the World Health Organization, above which a clear association has been found between prolonged exposure and cardiopulmonary diseases. In Spain, all cities except Bilbao, Valladolid and Zaragoza exceed this threshold.
• As for congestion in Spanish cities, it is estimated that the extra time spent commuting costs Spanish companies 840 million euros, with Barcelona and Madrid standing out, bearing losses of up to 175.5 and 187.5 million euros, respectively.