Friday, February 01, 2008

Unit 2: Negative externalities: London's £200 lorry charge

These 2 BBC clips and the report explainthat heavy polluting lorries will be charged £200 to enter London from Monday, as part of a drive to improve the city's air quality.

http://news.bbc.co.uk/player/nol/newsid_7220000/newsid_7222400/7222463.stm?bw=bb&mp=rm&asb=1&news=1&bbcws=1

http://news.bbc.co.uk/player/nol/newsid_7220000/newsid_7225600/7225647.stm?bw=bb&mp=rm&asb=1&news=1&bbcws=1

http://news.bbc.co.uk/1/hi/england/london/7225527.stm

a) How does the free market fail where these polluting lorries are concerned?
b) Using a diagram, explain how the £200 charge should reduce the market failure
c) What other actions can the owners take other than paying the £200?
d) How will the authorities back up the legislation?
e) To what extent do you believe the new charge will succeed in reducing the market failure?

This later clip shows how one firm has reacted to the charge

http://news.bbc.co.uk/player/nol/newsid_7220000/newsid_7226600/7226619.stm?bw=bb&mp=rm&news=1&bbcws=1

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