Ben Caldecott is a Senior Associate Fellow, and Sam Hall a Senior Researcher, at Bright Blue.

In one of his first major policy announcements as Environment Secretary, Michael Gove has demonstrated ambition in banning new diesel and petrol cars by 2040.

This is a very similar pledge to the one made by Emmanuel Macron’s government in France earlier this month, and follows a string of recent positive electric vehicle stories, such as the decision by BMW to assemble the new electric Mini near Oxford.

Electric vehicles are highly likely to dominate new vehicle purchases by 2040 in any case, because of the rapidly falling cost of lithium ion batteries. It has been forecast that electric vehicles will become cheaper than internal combustion engines by 2025.

But a ban is a useful measure for signalling to consumers, investors, and companies that the UK is firmly set on electrifying its vehicle fleet. This transition will deliver major public health and environmental benefits in the medium and long term, including helping the UK meet its important carbon emission reduction targets.

Setting a phase-out date for diesel and petrol, however, will not resolve local air quality issues in the short term, which currently causes significant harm to public health in many different parts of the country. Around 40,000 premature deaths each year are thought to be linked to air pollution. And in 2015, around 40 per cent of local authorities exceeded the legal nitrogen dioxide limit.

The most effective and targeted air pollution measure is a low emission zone, which charges old, dirty vehicles to drive in a polluted area. This follows the well-established “polluter pays” principle, that internalises the environmental and health costs of pollution.

But councils require funding from central government in order to be able to set them up, so today’s announcement of an additional £255 million funding is very welcome. But it is critical that this money is spent quickly and well.

Central government funds should be allocated in a way that encourages innovation and rewards success from local government. Therefore, to support good ideas to reduce air pollution, prizes and match funding should be employed.

In some cases, these schemes should accompany and complement low emission zones. They could include funding to change or expand bus routes, support for carpooling, public transport vouchers, or concessional finance to support the deployment of electric vehicle charging infrastructure.

Through this process, the Government would create a menu of different ways to reduce air pollution quickly and cost-effectively that would then be available to councils to deploy based on local contexts. This is a conservative approach to tackling poor air quality. It incentivises successful, bottom-up innovation while eschewing a single, centralised, prescriptive solution.

These ideas to reduce air pollution should assessed by experts from outside of government, not just civil servants. Civil society, health professionals, entrepreneurs, and policy experts should all have a role in scrutinising the proposals, providing feedback, and then judging their success. This would ensure local air quality schemes are encouraged to incorporate a range of perspectives and priorities.

The Department for the Environment, Food, and Rural Affairs should set up this challenge fund as soon as possible, and aim to award the first grants within 12 to 18 months. This gives time for local authorities to develop plans and submit ideas for implementation.

But it also means the first schemes are up and running quickly, fulfilling the legal requirement to bring air pollution within safe limits as soon as possible.

Today’s air pollution announcements provide a welcome improvement on the status quo. They are particularly strong on giving a long-term signal about electrifying the vehicle fleet and on providing additional funds for councils to tackle pollution in the immediate term. But the key now is to ensure the money is effectively and quickly spent, in a way that encourages innovation and safeguards public health.