Media Release

Use ‘pay-as-you-pollute’ road-pricing to reduce car use

Motorists should be charged for every mile they drive, with fees based on their car’s emissions and wider air pollution conditions, a think-tank says today.

The Social Market Foundation said a new “dynamic” system of road-pricing should be part of wider Government aim to reduce overall car use.   

In a new report, the cross-party think-tank said that politicians should use new technology to find ways to make previously-unpopular policies such as road-pricing more acceptable to voters.  Tackling climate change and air pollution will require a “change of mindset” among politicians, the SMF said.

According to the World Health Organisation, road transport is responsible for up to 30% of particulate emissions in European cities. Meanwhile, 22% of total UK emissions of carbon dioxide is due to road transport.

In a report considering options for using new technology to address air pollution and climate change, the SMF said that systems allowing real-time monitoring of both traffic flows and air conditions could be combined in a new generation of road-pricing regimes.

London has recently introduced an “ultra-low emissions zone” where most vehicles not meeting its emissions standards pay £12.50 for entering the centre of the capital.  The SMF said such “crude” methods of charging drivers according to their car’s emissions will eventually be replaced by “smart” pricing systems.

“A new system of road pricing is, from an economic perspective, by far the best long-term form of motoring taxation. Road pricing is also a good way of reducing the environmental costs of car ownership and encouraging individuals to use alternative means of transportation,” the SMF report says. 

Data from mobile phones or “black box” monitoring units on cars are already used to track traffic flows and power navigation apps.  The SMF said such data could be used to set road prices to put a higher price on travelling at busy periods or times when pollution levels are highest.

While politicians have previously been reluctant to embrace road-pricing, the SMF said that the shift to electric vehicles could swing the Treasury behind such policies, since the decline in combustion-engine cars means a long-term decline in tax revenues from road fuel duty.

To help get public consent and ensure fairness, the pricing system should include a “free allowance” of road usage each year, the SMF said.

Scott Corfe, Research Director of the Social Market Foundation, said:

“Dealing with climate change and air pollution will require a change in the mindset of all politicians. They need to move away from a focus on short term popularity and electoral cycles and make big, necessary changes even if those changes initially appear hard to sell to voters.

“Technology is advancing and public attitudes on environmental issues are shifting. That creates an opportunity to implement bold policies. Smart road pricing that makes drivers pay for pollution should be part of the answer the environmental challenge.”

As well as moving towards road pricing, the SMF said the Government should set a target for reducing rates of car ownership, and increasing the proportion of journeys made on foot, by bike and by public transport. Cities and large towns should aim for a quarter of journeys to be made by bicycle – a similar proportion to the Netherlands – the report said.

In other recommendations, the report said policymakers should:

  • Require large companies to collect and provide information on the environmental impact of their operations. Building on mandatory carbon reporting, this information should include effects on air quality, use of plastics and primary materials. Such data should be publicly available.
  • Commit to installing air pollution monitors in every postcode area of the UK.
  • Ensure that air pollution data gathered from these monitors is open source and accessible through an application programming interface (API), to support the development of apps providing personalised advice on air pollution.

The SMF report was part of a research project sponsored by Vodafone. The SMF retained editorial independence. The report, “4IR and the Environment”, is published in full at


For a full copy of the report, or for any other information, contact Barbara Lambert, SMF Media and Events Officer, on on 0207 222 6070

About the SMF:

The Social Market Foundation (SMF) is a non-partisan think tank. We believe that fair markets, complemented by open public services, increase prosperity and help people to live well. The SMF retains complete editorial independence of its publications.


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