Elisa Lanzi and Rob Dellink, OECD Environment Directorate
Air pollution in Delhi has been so bad this November that the Indian Medical Association declared a public health emergency. At more than 25 times the WHO recommended level, the pollution peak in India’s capital has been extraordinary. This is becoming increasingly common in Delhi and other cities around the world due to emissions from biomass burning, coal fire plants, agriculture and especially agricultural burning and diesel transport.
Dangerously high concentration levels of air pollutants, and especially of fine particles, cause an increase in asthma attacks and lung conditions. Alarmingly, air pollution is tied to longer-term chronic health problems, such as respiratory and heart diseases, premature and underweight babies, allergies and increasing incidences of cancer. All these lead to a sizable–and increasing–number of premature deaths and illnesses. According to the latest Global Burden of Disease study published in The Lancet, outdoor air pollution caused more than a million premature deaths in India in 2016, whose cost, according to OECD estimates, amounts to more than USD 800 billion. But that is not all: there is a range of other social costs associated with air pollution, such as costs related to pain and suffering, and costs to biodiversity and ecosystems.
Air pollution also exacts costs on the economy with additional health expenditures as well as lost work days, which affect labour productivity. And, agricultural productivity can also be severely affected by air pollution as high ozone concentrations and slow plant growth reduce crop yields with important economic consequences.
Strong policy action must be taken. According to projections by the OECD the population-weighted average concentrations of PM2.5–the finest, most harmful particles–are projected to increase threefold by 2060 if ambitious action is not taken. Premature deaths from being exposed to pollution are projected to increase up to five times. This is a staggering number, and represents up to a third of global projected deaths in 2060. Incidences of illness will similarly worsen. Lost working days will increase significantly, to levels equivalent to more than six million people missing work on a daily basis by 2060.
Market costs to the Indian economy are projected to increase eightfold to over USD 280 billion by 2060–this is more than 7% of India’s current GDP (in 2005 Purchasing Power Parities exchange rates). The social costs from mortality due to air pollution would increase 15 to 33 times, as both the number of premature deaths and the value per death increase.
Air pollution is a global local problem: it is a global phenomenon with local environmental and human health impacts, particularly in high-density urban areas. As such, public policies to reduce emissions must be undertaken both at the national and local levels. International co-operation on limiting concentrations and implementing the best emission reduction technologies is essential for countries to put into motion solutions and policy tools to bring down air pollution. Urban planning and transport have a central role to play here.
Air pollution is also strongly linked to another global problem: climate change. This week at the 23rd Conference of the Parties to the UNFCCC (COP23) in Bonn, policymakers face decisions on their level of commitment in combatting climate change. Taking a closer look at its link with air pollution could provide impetus for immediate policy action. It would prevent higher numbers of premature deaths, and have a positive impact on the economy too.
References and links
Safi, Michael “Delhi doctors declare pollution emergency as smog chokes city”, 7 November 2017,The Guardian. See: www.theguardian.com/world/2017/nov/07/delhi-india-declares-pollution-emergency-as-smog-chokes-city?CMP=share_btn_link
OECD (2017), “The Rising Cost of Ambient Air Pollution thus far in the 21st Century: Results from the BRIICS and the OECD Countries”, OECD Environment Working Papers, No. 124: http://dx.doi.org/10.1787/d1b2b844-en
See the latest Global Burden of Disease at http://www.thelancet.com/gbd
Shayne MacLachlan, OECD Environment Directorate
Anyone else feeling exhausted by all this drum humming about air pollution? Indeed it appears the fumes won’t be dissipating any time soon as we consider the extent to which tyre and brake rubbish exacerbate the problem. The European Commission says exhaust and non-exhaust sources may contribute almost equally to total traffic-related PM10 emissions. A few months ago, I was proposing (on this very Insights blog) that electric cars are essential in fighting filthy air pollution in urban areas because humans are unwilling to relinquish the comfort of their vehicles. Since then, I find myself mulling hard after this “alarmingly obvious” realisation that electric cars use tyres and brakes too! Even if they emit less of the harmful fine particles than conventional vehicles, please do feel free to file that blog in the “seemed like a good idea at the time” folder. And to turn insult to injury, I see that my own colleagues at the OECD have just published new data on PM2.5 emissions which did little to ease my blushes.
A lot of non-exhaust pollution from tyres and brakes winds up in rivers, streams and lakes. They produce particulate matter (PM10 and PM2.5) which is more harmful for humans than gas pollutants like ozone and NO2. Fine particulate matter penetrates deep into your lungs and cardiovascular system. New research has even discovered tiny particles of pollution inside samples of brain tissue. The OECD is amongst a few international organisations proudly leading the fight against ambient air pollution. And rightly so, with 80% of the world population exposed to PM2.5. Outdoor air pollution causes 3.7 million premature deaths a year and 1 in 8 people die from filthy air. OECD Environment Director, Simon Upton recently stated that air pollution is not just an economic issue, but also a moral one. He urges governments to stop fussing over the costs of efforts to limit pollution and start worrying more about the even larger costs they will incur if they continue to allow it to go unchecked.
Dead “tyred” but rolling on
Tyre rubbish is the 13th largest source of air pollution in Los Angeles, California, a city famous for its smog. A recent study showed links between PM2.5 particles and the daily death rate in 6 Californian counties. When the PM2.5 count was high, so was the death rate. Then there’s nanoparticles, ultrafine particles used in tyres. Manufacturers didn’t know it at the time but research now contends possible links to lung cancer from recycling some of the 1 billion dead tyres used in, for example, the surfaces of playgrounds. Some are calling it “the new asbestos”. The complexity of the problem is evident: there are over 1 billion cars on the road globally and on top of that just as many motorbikes and scooters. Add to that the pneumatic tyres used on trucks and public transport such as metro train systems and buses and we have a considerable source of road rubber. A road with 25,000 vehicles using it each day can produce up to nine kilograms of tyre dust per kilometre. That’s only ¼ of the 100,000 cars that use the Champs-Elysées each day so that makes at least 36 kilograms of tyre pollution a day on the world’s most famous street.
Bliss ignorance until my tyre burst
When I think back 10 years, sharing my time between the “not so clean” cities of London and Paris, I really had no idea that the air in these places was so bad. I recall often emptying my nostrils of its black contents after using underground transport, but now learning about the added impact of tyre and brake rubbish, I’m not really sure being better informed is better—at least from a personal health standpoint. I have friends in Paris that actively avoid Châtelet and other central metro stations for a number of reasons, one of those being the eye-watering pollution. The metro trains’ brakes and tyres are contributing to this “perfect pollution storm in a subterranean teacup”. Sometimes you can find between 70-120 micrograms of PM10 per m3 down there with peaks at 1,000 micrograms per m3 trapped in the station. In comparison, the average concentration of PM10 outside is around 25-30 micrograms per m3.
So what can we do?
In an ideal world, we would ditch cars completely, but I’m not sure we’re ready to take that step yet. However, several cities are working on implementing policies that will ban or severely reduce the amount of cars. Oslo announced a plan to ban all cars from its city centre in 2019; and Norway is in the process of preparing a bill that would issue a nation-wide ban of the sale of petrol-powered cars. In places such as Tuscany, cars are banned in city centres except for residents. Others park their car just outside and then take public transport. This is common in the UK too. This means that when there are more people in the centre during the day, there are fewer cars, meaning fewer people are exposed. Hopefully, other cities and nations will be inspired by such drastic changes in transportation methods and follow suit. There are certainly enough reasons to do so.
Play the cards dealt and work towards a better hand
It’s hard not to feel we’ve exhausted our current options. I’ve gone through several cycles of choosing my methods of transportation and have ended up cycling—literally and figuratively. Do bicycle tyres contain rubber (though they emit precious little)? Yes; and so do bus and some metro train tyres, as well as motorbikes and scooters. We are left with only imperfect options. They won’t solve the problem, but they can reduce it and that’s something to be optimistic about. As with many actions that influence health and the environment, human behaviour and choices matter massively. Choosing the least damaging option of getting around your town means the bicycle is still a great option. It might also be worth trying to avoid times in which the pollution levels are the highest: 9h, 12h and 18h in many cities. But of course the exercise and associated heavy breathing whilst riding, exposes you to the risk, even though you are contributing least to the problem. So while the thought of all that damaging pollution is ever so “tyring”, it seems that the pollution, including from brakes and tyres itself might also leave you feeling worse for wear.
An international deal on air pollution
WHO guidelines indicate that by reducing PM10 pollution from 70 to 20 micrograms per m3, air pollution-related deaths could be reduced by roughly 15%. Staging a climate COP (Conference of the Parties) style conference to address air pollution emissions seems like a good start. Who could disagree that setting limits for polluting emissions from all sources is an absolute minimum requirement to give our lungs and environment a breather. Moving forward, it’s crucial we keep pushing governments to come up with innovations and policies that vigorously tackle air pollution issues. Governments also need to ensure that people are aware of the issues and help them make the best choices. In the meantime, we all have to play the cards we’re dealt and make a conscious effort to choose least polluting options.
OECD data on emissions:
Grace Hanley, OECD Environment Directorate
How did a recently-promoted German janitor use uranium to change the course of history and prove the President of British Association for the Advancement of Science right? In his 1898 presidential address, Sir William Crookes told the Association that: “England and all civilised nations stand in deadly peril of not having enough to eat … the land that will grow wheat is absolutely dependent on difficult and capricious natural phenomena … It is through the laboratory that starvation may ultimately be turned into plenty… The fixation of atmospheric nitrogen is one of the great discoveries, awaiting the genius of chemists.” The genius was Fritz Haber, who has renounced his Judaism in the hope of getting a university job. He got one as a janitor at Karlsruhe University, but by 1898 had worked his way up to a professorship. He used uranium as a catalyst to produce ammonia from atmospheric nitrogen in 1909, a process that BASF engineer Carl Bosch helped him to scale up to commercial viability by 1912.
The Haber-Bosch process enabled artificial fertilizer to be manufactured massively and cheaply, and we still use a modified Haber-Bosch process today. Chemical factories now produce more nitrogen than the microbes in the soil do, but while this has boosted agricultural productivity and allowed world population to continue expanding, it has also caused devastating pollution.
The main problem is that nitrogen is used inefficiently by the agricultural industry, which triggers enormous nitrogen losses to the environment, resulting in ecosystem degradation and biodiversity losses as well damaging the land and water. The ammonium nitrates contained in fertilizers are easily soluble, which allows rainfall to carry them into run-off water and seep into water supplies, causing algal blooms and oxygen depletion in the water. Such effects devastate ecosystems and create ocean dead zones.
Research has also implicated nitrogen’s role in climate change, and it is critical that we take collective action to reduce it. There’s a lot of talk about carbon footprints, but we are only beginning to hear about the realities of our nitrogen footprint. As assistant professor at New York University, and recent visitor to the OECD David R. Kanter suggests, there is a need to better integrate nitrogen concerns in domestic policies and room in international law to include nitrogen. In fact, there really is no room to exclude nitrogen because we cannot afford the costs of reparation if we continue business as usual.
Kanter argues that nitrogen could be included in one of the most successful treaties in international law: The Montreal Protocol, where there was universal ratification by all 197 parties to protect against substances that deplete the ozone layer. The Protocol is a landmark of sustainable development and the principle of common but differentiated responsibilities. As nitrogen in the atmosphere contributes to ozone depletion, it is important that it is explicitly included.
Chemists often talk about balances, as so do bankers, and the financial world could provide us with some useful lessons, or stark warnings, about what happens when you get the balance wrong. Take the 2007-08 crisis in the United States for example. The big banks supported unrealistic subprime housing loans to people who would likely never be able to pay them off. This allowed people to purchase impressive homes and spend money they didn’t have for a time—until it all came crashing down. Long story short, reality set in and it put the entire US economy in turmoil, which escalated into a global financial and economic crisis.
What does this have to do with nitrogen? The first lesson is that the crisis was avoidable. Had realistic standards and regulations been put into place, the financial climate of 2007-08 would have looked drastically different. The same is true for nitrogen: if we co-operatively manage nitrogen efficiency and minimise the amount of excess nitrogen emitted into the environment, we will drastically improve our social, economic and environmental conditions in the coming years. Policymakers must create regional specific strategies and policy instruments to implement these in international and domestic legislation.
Let’s not follow the example of the 2007-08 global financial crisis. Fiscally, we have seen how living beyond our means has serious consequences. However, government bailouts have enabled us to tolerate the idea that living beyond our means isn’t fatal. There has always been an eventual—although not always ideal—solution to our fiscal woes. However, the environment is less forgiving. We don’t have the luxury of requesting bailout replenishment from Mother Nature. Rather, let’s take the example of the Montreal Protocol which attests to the importance of co-operation and regulation to ensure environmental and economic stability and get things back into balance.
Elisa Lanzi, OECD Environment Directorate
“Paris sera toujours Paris, la plus belle ville du monde”, as Maurice Chevalier sang in 1939; the most beautiful city in the world! And yet, the city of light does not always shine: some days a year air quality is so bad that the Eiffel tower only looks like a faraway shade. Unfortunately, Paris is not the only place with air pollution problems and it is far from being the worst. The average yearly concentrations of PM2.5 were 18 µg/m3 in Paris in 2014, which is above the levels recommended by the World Health Organisation (WHO). But they were much higher in other cities, such as the Beijing area where they were more than 90 µg/m3.
Air pollution is a serious issue in most countries around the world and every year it causes severe damage to human health and the environment. The WHO estimates that ambient air pollution is the greatest environmental risk to health – causing more than 3 million premature deaths worldwide every year. Besides such a high death toll, air pollution affects human health, especially through respiratory and cardiovascular diseases. Moreover, there are strong effects on the environment, both natural and man-made. Think of all the beautiful monuments and buildings that regularly need cleaning because of the damages of air pollution…
None of this is really new, and air pollution has been a priority in environmental policy for decades. Yet it is still unresolved and clearly worsening in many areas of the world. To further motivate policy action, the report The Economic Consequences of Outdoor Air Pollution presents projections of emissions and concentrations of key pollutants, the related number of premature deaths, impacts on illness and on crop yields, and the resulting costs of outdoor air pollution.
According to the projections in this report, increasing economic activity and energy demand will result in higher emissions of air pollutants in the coming decades. This, together with other factors such as climate change and urbanisation, will lead to higher concentrations of PM2.5 and ground level ozone. Under business as usual, air quality is expected to worsen so much in the next decades that the amount of people in the world exposed to very high PM2.5 concentration levels is projected to double by 2060. In China and India, where concentrations are projected to reach particularly high levels, up to 60% of the population may be exposed to very high PM2.5 concentration levels by 2060.
Outdoor air pollution is projected to be the cause of 6-9 million deaths every year by 2060 at the global level, up from the 3 million deaths estimated in 2010. That is roughly equivalent to a person dying every 4 to 5 seconds. The projections show that there will also be an increasing number of cases of illness. For example, the report projects that, by 2060, around 3.75 billion working days could be lost due to illness.
These impacts from outdoor air pollution have economic consequences. Increasing cases of illness will result in people having more medical expenses, meaning that they will end up spending less on other things. Lost working days reduce labour productivity and lower crop yields reduce agricultural output. Such effects, when considered at large scale, can affect economic growth. This type of cost is referred to as “market cost” as it is related to market transactions, and is projected to be around 1% of global gross domestic product (GDP) by 2060. That is equivalent to the current GDP of France.
But air pollution also has consequences that go beyond market costs. The impacts on mortality and the pain and suffering from illness do not have a market price. Yet, they can be a heavy burden on people and on society. Using the results of studies that directly ask people how much they would be willing to pay to reduce health risks, we are able to place a value on these “welfare costs”. While these are not a direct cost to the economy, they nevertheless reflect people’s preferences and how much they value a possible policy that would reduce health risk. The global annual welfare costs associated with the premature deaths from outdoor air pollution are projected to rise from USD 3 trillion in 2015 to USD 18-25 trillion in 2060.
If public health and the environment weren’t convincing enough to push policy-makers to act, projecting future economic costs might encourage them more. Several policy options are available for policy makers, including emission pricing, fuel efficiency and quality standards, incentives to adopt end-of-pipe technologies or spatial planning. Policy makers just need to pick what is best for their countries.
Wouldn’t it be great if we could breathe clean air? We’ll always love our cities – “Paris sera toujours Paris” (so much so that the 1939 song has come back to the radio in a modern version by Zaz now) – but we would all enjoy them more if we didn’t have to worry about our health. And, since we’re at it, it would be nice to be able to take clear pictures of monuments, from the Eiffel tower in Paris to the Imperial Palace in Beijing.
Shayne MacLachlan, OECD Environment Directorate
Paris is a beautiful city but has an ugly problem with air pollution. Using 2 wheels to get to work, one becomes acutely aware of this insidious addiction to cars, and the “essence” of the problem, DIESEL. Queuing at the red lights (which unlike many Parisians I observe) sucking up the carcinogenic fumes, should I feel happy or sad knowing that those in the cars themselves are getting a worse dose of “the product” than those using greener ways to get about? Switching to electric vehicles could save some lives and certainly might help the French public purse as the health, economic and financial damages of air pollution are costing the country an estimated EUR 100 billion per year.
Commendable effort, limited results
It’s not like Paris hasn’t made a huge effort to reduce air pollutants like benzene, nitrogen dioxide (NO2), ozone and fine particles PM2.5 and PM10. Over the last 10 years it has put in place the Vélib bicycle system, the electric car equivalent Autolib, constructed bus lanes that can be shared by cyclists, closed roads and built car-annoying pedestrian crossings in an effort to encourage cleaner mobility. The speed limit on the périphérique (ring-road) has been reduced to 70kph and it is even letting cyclists run (certain) red lights. Paris is banning trucks and dirty diesel cars during certain hours in the city. Although there have been some improvements, the level of NO2 (although not all comes from dirty transport) in parts of Paris during 2015 regularly exceeded 100µg/m3 and averaged 66µg/m3 over the year which is way above the EU limit of 40µg/m3.
So why the foul air?
Paris is teeming with 4-wheeled vehicles but many city residents don’t actually own cars. If you look at the number plates of the vehicles clogging and gassing the streets, many of them come from “les banlieues”, or suburbs around the city. Even though the trains are very reliable and generally run on time (except from September-December which is strike season), it seems that for many, the comfort and practicality of the car is just too much to sacrifice. This choice often means you’ll be stuck in kilometres of traffic every morning and evening, but it seems drivers can’t give up their personal space with their tunes, make-up kits and phone conversations all to themselves.
Time for a pit-stop switch
So if we can’t forego this crooked comfort, we need a MASSIVE switch to electric vehicles (EVs). France wants to have two million EVs on the road by 2020 but currently just over 1% of new vehicles in France are electric. In Norway, it’s 13%. Cheap oil isn’t helping us switch to electric, but we must stop subsidising diesel to make dirtier vehicles much more expensive to run. Officials in France recently agreed that diesel taxes will increase, and those on gasoline will fall, “to neutralise the difference” in the next 5-7 years. It has taken a while for the light to turn green, but for the residents of Paris and other French cities, this is welcome news.
Purchase price and low fuel costs matter
In 2012, the ITF (International Transport Forum) reported that battery electric vehicles cost €4-5K more to their owners than an equivalent fossil-fuel car over the vehicle’s lifetime. A friend of mine was buying a car a little while back. I asked him why he didn’t go electric and I got a gruff response “it’s out of my budget range”. This is in spite of a healthy government rebate of up to EUR 10k for some EV switches. Studies have found that among the most important incentives to buying EVs are purchase price and low fuel costs. Even with purchase bonuses, the pricing of new EVs means they are still not a viable alternative for many. There could be other reasons too for the slow EV take-up such as the insufficient battery charging infrastructure, the time taken to charge a vehicle when compared to filling up at the gas station and annoying distance limitations. Some drivers are also concerned about whether the power used to charge their EV is coming from renewable or fossil-fuelled sources, and what the batteries are made from and how they are disposed of.
Driving the point home
While governments must hammer down the purchase price of cleaner vehicles with even healthier financial enticements, strong disincentives such as imposing a London- or Milan-style congestion charge for high-polluting vehicles may also push consumers to switch. Add toll-free roads, access to bus lanes and lower registration fees for EVs to the list, and they might look a whole lot more attractive. And with the recent VWgate emissions scandal leaving a sulphuric taste in diesel owners’ mouths, one asks whether it’s not the ideal time to make diesel the new public enemy number one, as we’ve done with our ex-friend coal.
Off and running
So as I finish up this morning’s “blog/moaning session” and run off for some lunchtime exercise, (wondering how long before I cough up a chunk of coal) it seems that the checkered flag is a long way off for successful policies that ditch dirty vehicles and encourage a massive switch to EVs. An even bigger “helping hand” for new EV purchases, along with a tailored package of carrots and sticks, may help reduce my flabber-gas and boost our life-expectancy by a few years. Failing all of that, more of us could work from home but that sounds like a good topic for another time.
In the last decade two-wheeler electric vehicles have been taking over the streets of Asian capitals, to the point that it is time to declare the gas moped commercially dead. Rest in peace.
While in the western world electromobility remains the domain of a technological elite, it has already arrived to the masses in Asia. China counts over 180 million e-bikers and produced nearly 37 million e-bikes in 2013 and 450 million bicycle users are waiting to buy an e-bike as their next mean of transport. In all South-East Asian countries where driving a two-wheeler vehicle is more popular than driving cars, electric vehicles are displacing gasoline vehicles as the dominant mode of urban transportation.
Two-wheel electric vehicles come in different kinds. If it has pedals, then it is called an electric bicycle, the equivalent of a moped. Otherwise it is called an electric scooter. It is dignified by an upgrade to the motorbike category if its top speed is above some legal limit – 50km/h here in Vietnam. All are powered by batteries which are recharged by plugging into a domestic wall socket, demonstrating that the need for a dedicated charging infrastructure was a myth.
The advantages of this means of transportation are that it generally does not require a driving licence, is faster than a bicycle, more convenient than bus and cheaper than a motorbike. Indeed the average e-bike in Asia costs only $167. The market is very different in the western world, where the average e-bike costs $800 in the USA and $1500 in the EU. The savings on fuel costs are also real, even in a dirt cheap oil year.
In some places electric two wheelers have an image issue, as the first segment to have taken the market is e-bikes designed for high schoolers. But producers upgrade technology and design every year. For example, for $720 in Vietnam one can have an electric scooter which goes up to 50km/h, carries two adults thanks to a 1200W power motor, has a 100km range and copies the design of the Vespa Primavera, an iconic Italian model. This cost is about the average monthly salary in Hanoi, or six times the monthly minimum wage in Vietnam.
As the technological frontier moves, the market shifts from basic e-bikes, that already pushed the good old gasoline moped into obsolescence, to bigger electric scooters. This is mostly happening without government subsidies or targeted policy. The market shifts because there is demand and technological progress. The demand pull is allowed by light regulatory constraints, in contrast with motorcycles which are more heavily regulated, not to say banned from some downtown streets in many Chinese cities.
The number of road accidents with e-bikes and e-scooters can only increase a lot, along with the popularity of these vehicles. The accumulation of risk factors to the drivers is worrying: teenagers, people with no driving licence, riding a vehicle with high acceleration, high speed, wearing no protection, riding in urban traffic; weakly enforced vehicles standards and traffic regulations. Risk factors to others also include no registration makes it easier to flee after hitting someone, and the use of the bike lanes endangers slower traffic. There is a controversy about the low noise of electric vehicles: pedestrians can’t hear them coming. Most available studies look at electric or hybrid cars, not at two wheelers, and the other risk factors listed above make it difficult to determine causality, and conclude with robust confidence that silence is a risk factor. I would prefer to make the rest of the traffic quieter than to make the electric vehicles louder.
Is this technological shift a good thing for the environment? Electricity is not yet so green everywhere. More advanced chargers and systems are required to make the electric vehicles a part of the smart grid. Another problem which remains to be managed is that the most popular models have a lead-acid battery. Lead pollutes, especially in countries where the recycling system is inefficient, and each battery contains 10kg of it.
But at the city scale, the environmental benefits are clear: the e-vehicles are silent and release no exhaust fumes. The advantages regarding the local air quality are especially important in Asian capitals, which are the most polluted cities in the world. According to our estimates, a typical gas scooter emits 0.1g of fine particulates per kilometer, or 400g per year. A typical electric scooter causes ten times less emissions in a country like Vietnam where half of the electricity comes from coal.
The market cannot be trusted to produce lighter and cleaner gas vehicles. The switch to electric two wheelers and cleaner power appears a more powerful way to solve the Asian cities air quality crisis.
Shifting Towards Low Carbon Mobility Systems OECD International Transport Forum Discussion Paper
Suzi Tart, OECD Environment Directorate
The current Volkswagen diesel emissions scandal highlights the difficult reality of making the transition to a low-carbon economy. It also highlights the growing need for governments to make smart policies, based on actual costs.
One might think air pollution is not a big problem because in most cases we can’t see or smell it until it reaches a critical level. Data shows that we should be concerned. Health costs from outdoor air pollution in OECD countries in 2010 amounted to $1.7 trillion. Of that amount, road transport accounted for nearly $1 trillion. Outdoor air pollution not only takes away from the quality of one’s life, it also kills. The number of premature deaths due to outdoor air pollution is estimated to be around 3.3 million each year. The growth in vehicles being added to the streets in China and India mean that this figure is on an upward trend worldwide, although it has been declining in many OECD countries due to emissions controls on vehicles.
Car companies such as VW that are cheating the system therefore risk derailing the modest progress that has been made. Tighter emissions standards for vehicles in OECD countries were a step in the right direction; yet as we have learned, one step is not enough to get us to our destination. Policymakers had no doubt hoped to encourage innovation and investment in clean fuels with such measures. Rather than losing hope however, governments should maintain their strong regulatory regimes and emissions controls. They can also help unlock the potential market power for clean fuels by supporting more research and development in this field, as well as implementing wise tax structures.
Diesel is an example of an unwise tax. Diesel-fuelled engines are considered to be more damaging to both the environment and human health than gasoline-fuelled ones. Yet diesel has a lower tax rate than gasoline does in most OECD countries. Many people fear that diesel-fuelled cars outside of the US will also be found to have “defeat devices” installed on them. If that is indeed the case, at least some of the damage inflicted on our environment and health presumably could have been avoided. Had tax structures properly reflected the degree of environmental and social costs, the higher tax on diesel would have yielded a lower demand for diesel-fuelled cars, hence fewer consumers would be driving them today.
While the world waits to see just how many cars are cheating the system, citizens continue to suffocate and Earth continues to overheat. Transitioning to a low-carbon economy will not be easy, but with the right mix of policies, it can be achieved.
Avoiding death by diesel, Simon Upton, OECD Insights