The Gothenburg congestion tax and air quality-A difference-in-difference analysis

Abstract: Causing 300 premature deaths each year, the air quality is a major problem in Gothenburg. In 2013, the Gothenburg congestion tax was implemented with the goal to reduce congestion and improve the air quality in the city, as well as to finance investments in infrastructure. The aim with our study is to investigate if, and to what extent, the congestion tax has reduced air pollutants, with focus on nitrogen oxides (NOX) and particulate matter (PM10) concentrations. We analyse this by using a difference-in-difference approach where our control group is Malmö, a Swedish city without congestion tax. Since it is evident that meteorological conditions largely affect emission levels we control for wind speed and precipitation in our regressions. We find evidence that the implementation of the congestion tax was associated with reduced NOX as well as PM10 levels in Gothenburg with up to 17-19 %. Hence, we draw the conclusion that the implementation of the congestion tax had a general positive effect on the air quality in Gothenburg.