The great diesel scandal: how cheap fuel is choking our cities

Stand at a busy road junction on a bright day and chances are you will see it: a Wacky Races cloud of black smoke left hanging in the air after a car pulls away. These clouds are actually particles of soot – partially burnt fuel from diesel engines – and they are arguably the worst environmental menace facing city-living Britons – and children in particular.

Diesel vehicles have enjoyed a surge in popularity on our roads, rising from less than a quarter to more than half of all cars sold in the last five years. In the recent past, they were even touted as more environmentally friendly than petrol vehicles, because they burn less fuel and so can produce, overall, less CO2. This green image, however, was always an illusion: diesel engines burn fuel less cleanly than petrol-driven models, resulting in a large excess of particulates – the visible clumps of soot left behind in the exhaust fumes.

Particulates are one of the worst offenders in air pollution because they damage the lungs when inhaled. "It has been known for a long time that diesel particles are harmful, and the links to lung cancer have been widely published," says Penny Woods, chief executive of the British Lung Foundation. "Along with other major factors such as poor diet and smoking, diesel levels in a large city like London have been associated with significant health problems." For children, especially, this can cause a permanent stunting of lung growth. And the picture may be even worse than current studies show: "There is a growing consensus in the medical community that diesel particulate emissions are more dangerous to health, particularly lung health, than previously thought," adds Woods.

Yet despite our growing knowledge of the problem, the coalition's policies – which follow on from equally harmful policies under the previous government – still favour diesel over petrol, and motorists continue to respond by opting for diesel in the showroom and at the pump. Diesel is taxed at exactly the same rate as petrol, a situation that the Treasury argues is fair and shows no favouritism between the fuels. The problem with this argument is that diesel cars travel further on a gallon of fuel than their petrol-driven counterparts, so the tax per mile is much lower.

The answer, according to a growing number of experts, is to tax diesel more heavily and regulate its use more strictly. The British Lung Foundation firmly supports a rethink, says Woods. Simon Birkett, founder of Clean Air in London, also supports higher taxes, as does the environmental group Client Earth, and the RAC Foundation, while Friends of the Earth wants a fuel-tax review and Greenpeace says higher taxes in urban areas may be the best approach.

Boris Johnson, the mayor of London, favours a localised response. Stung into action by the threat of large fines from Europe as London repeatedly burst through the permitted air-pollution levels, he unveiled plans last week for a doubling of the congestion charge for diesel vehicles, to come into effect from 2020. In case that is not sufficiently effective, he is also lobbying government for an increase in diesel taxes relative to petrol across the board.

Across Europe, the favourable treatment of diesel compared with petrol is even more pronounced. According to the European Commission, most EU member states tax diesel at a lower headline rate, meaning diesel costs on average 10% less than petrol at the pump even though it can cost 10% more to produce. In 2011, the commission proposed a minimum price on diesel. But the plans have since been bogged down in Brussels under pressure from the motoring lobby and automotive industries. "There is not the political will," said one Brussels official.

While politicians stall, the automotive industry insists it is cleaning up its act, without the need for new taxes or regulations. "The automotive industry has committed billions of pounds in recent years to reduce and eliminate emissions from all engines types: it takes 100 cars produced today to emit as many polluting elements as one car made in the 1970s. Vehicles manufactured today feature filters that capture over 99% of particulates," says Keith Lewis, head of communications at the Society of Motor Manufacturers and Traders, which represents the industry. "Nitrogen oxides (NOx) emissions from cars [were] reduced 81% between 1990 and 2010, despite a 19% increase in distance travelled." He points out that "building generators, aeroplanes, trains, commercial boilers, patio heaters, all of which also produce the same emissions our sector is working so hard to reduce" have an impact in urban areas such as London. However, none of these produce the widespread ground-level particulate emissions that are the main hazard from diesel, particularly to children.

The British Lung Foundation says it is too soon to say whether the new filters will prove clean enough, or whether the improvements will be outweighed by the rapid growth in the number of diesel vehicles: "We can't tell until studies have been done to measure the effectiveness."

Tax is not the only means that should be used to reduce the impacts of diesel use, according to experts. Iain McLellan, policy officer for Environmental Protection Scotland, also sees the need for "policies such as incentivising ultra-low-emission vehicles, integrating public transport and increasing city-centre pedestrianised areas". Tony Juniper, long-time environmental campaigner and adviser to the Prince of Wales, agrees that a fuel tax could be a blunt instrument, particularly in rural areas where there are few vehicles and air pollution is not an issue. "Other tools are needed, including road-use charges for those areas where air-quality standards are regularly breached."

In London, diesel emissions are now so bad that on several days earlier this summer, children, older people and vulnerable adults were warned not to venture outside. How long before this starts to have an effect on London's economy? Diesel fumes do not respect house price boundaries, with London's royal borough of Kensington and Chelsea one of the worst polluted areas in the country. Rich bankers in a famously mobile industry may eventually balk at bringing their children to a city where they cannot safely breathe. Perhaps this democracy of the air will prove more effective than the special pleading of the motoring lobby.