Scrapping Diesel May Cost London $643 Million Over Two Years

(Bloomberg) -- A program to scrap diesel vehicles in London may cost as much as 515 million pounds ($643 million) over two years, according to Mayor Sadiq Khan in a report that also calls for a national version of the plan.

Drivers of 70,000 of the most polluting vans and minibuses in the U.K. capital would each receive 3,500 pounds to swap for cleaner vehicles, and 10,000 drivers of London’s oldest taxis would get 1,000 pounds each with additional support from the Mayor’s office, according to plans published Sunday.

As many as 130,000 poorer households would receive 2,000 pounds “mobility credit” for scrapping their diesel-fueled cars, according to the report that said deprived communities suffer worse pollution than richer areas in London.

The proposals follow Khan’s election promise last year to slash pollution, focusing on curbing harmful nitrogen dioxide emissions from diesel vehicles that account for about half of U.K. sales.

London suffers some of the worst pollution in Europe, causing almost 10,000 premature deaths a year, according to research by the Environmental Research Group at King’s College London. Last month, the city’s poor air quality set a modern record when cold, windless weather trapped emissions over the capital.

“The toxic state of our air leaves us with no choice but to rid our city of the most polluting vehicles,” Khan said in an e-mailed statement, in which he called on the U.K. government to review its vehicle excise duty that encourages drivers to buy diesel cars.

The costs of London’s diesel scrapping plan could be reduced by the auto industry, said the report written by Transport for London and Cambridge Economic Policy Associates Ltd. The document outlines plans for the program to be expanded nationwide, targeting the most polluted cities.

The cost of the policy would be offset by a reduction in the economic cost of the health impacts linked to poor air quality, the report said. That’s estimated to cost London 1.4 billion pounds to 3.7 billion pounds a year, according to King’s College.

To contact the reporter on this story: Jessica Shankleman in London at jshankleman@bloomberg.net. To contact the editors responsible for this story: Reed Landberg at landberg@bloomberg.net, Keith Jenkins