Low Emission Zones and Traffic Congestion: Evidence from Madrid Central

Abstract

The aim of this paper is to shed light on the effect of Low Emission Zones (LEZs) on traffic. LEZs are areas in which access is restricted for the most polluting vehicles. They have been found to be effective in reducing pollution, while the expected effect on traffic is not clear. Using high-frequency granular data on traffic for the city of Madrid, I analyse whether LEZ schemes are effective in reducing traffic within the area of implementation and whether they generate a displacement effect. Taking advantage of the exogeneity of the implementation timing, I develop a pre/post analysis based on time. Results suggest a reduction in traffic inside the restricted area and a displacement to all the other areas of the city. I find a switch to public transport for commutes directed towards the restricted area and rerouting of trips for destinations outside Madrid Central to be two of the possible mechanisms explaining these results. The reduction in transit inside the restricted area gradually decreases over time and disappears after 7 months. This is consistent with the renewal of the vehicles’ fleet with unrestricted and cleaner vehicles generated by the policy.