The new OCR GCSE specification expects pupils to have an understanding of policies the government could use to help reduce externalities. The mayor of London, Boris Johnson has outlined a plan to make drivers pay for using the busiest roads in the capital.
The plan suggests that drivers should be charged £1 per mile to use the busiest roads in London, such as Edgware Road and Hyde Park Corner. This would be in addition to paying the London Congestion charge.
This article explains further.
Will this new tax really reduce the congestion and pollution (negative externalities) or will it in fact simply increase the revenue received by the government due to the inelastic nature of demand for cars?
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