Why do we have CAZ cameras? To reduce vehicle emissions in inner cities? Or is there no real evidence that they have such extensive social and economic benefits?
The cost of installing each CAZ enforcement camera has been estimated to be around £22,000, added to which is the cost of keeping the electronic tracking system in working order before it needs replacing.
Supporters of the use of clean air zones believe that any reduction in respiratory illnesses resulting from their use justifies these implementation costs. Moreover, they claim that cleaner city air can improve the health and life expectancy of urban residents. Seen in this light, some economists believe that urban clean air initiatives have the characteristics of merit goods underprovided by the free market.
The City Clean Air Alliance (CCAA) claims that a 10% reduction in diesel vehicle miles in city centres leads to an 8% fall in local childhood asthma hospital admissions. The external costs generated by air pollution are huge, estimated to cost the National Health Service (NHS) and the wider economy up to £1.8 billion annually due to healthcare provision, emergency treatments, and lost workers' productivity.
However, a number of business groups and haulage associations dispute this. Some argue that traffic congestion, and not tailpipe emissions themselves, is the underlying cause of urban air issues. They believe that CAZ cameras actually cause government failure by creating 'displacement pollution', forcing older, more polluting vehicles onto detour routes through suburban residential areas. Business groups also argue that CAZ cameras are simply revenue-raising devices for local councils. According to these arguments, the provision of CAZ cameras is a source of government failure.
The costs of installing and maintaining CAZ cameras are paid for by local government (local councils), but the financial revenues generated by the heavy daily charges and compliance penalty fines are often shared or subject to strict central government regulations on how they can be spent.
In autumn 2023, the government announced a delay to several net-zero mandates and reviewed funding allocations for local councils' low-emission transport infrastructure, as part of a political commitment to 'protect families from extra costs'.
Immediately, several city councils announced that, to save money and support local businesses during a cost-of-living squeeze, they were postponing or reducing the size of their planned clean air enforcement zones. Other local councils said they were considering similar pauses.
Public health, however, may be put at risk as a result of these shifts. According to leading environmental health specialists, urban nitrogen dioxide (NO2) levels have fallen by up to 30% in cities that fully implemented CAZ camera networks. One specialist warned: 'We recognise that councils have to manage tight budgets. We recognise that economic growth is vital, but pulling back on clean air schemes is a direct threat to public health.'
'... the implementation of Clean Air Zone (CAZ) cameras is a source of government failure' (Extract E).
Using the data and your economic knowledge, evaluate this view.
378 exam-style questions on AQA A Level Economics 1.8 The market mechanism, market failure and government intervention in markets, covering 1.8.1 How markets and prices allocate resources, 1.8.2 The meaning of market failure, 1.8.3 Public goods, private goods and quasi-public goods, 1.8.4 Positive and negative externalities in consumption and production, 1.8.5 Merit and demerit goods, 1.8.6 Market imperfections, 1.8.7 Competition policy (A-level only), 1.8.8 Public ownership, privatisation, regulation and deregulation of markets (A-level only), 1.8.9 Government intervention in markets, and 1.8.10 Government failure. Each one has a worked solution and a mark scheme showing where the marks go.