Francesca Colombo, Head, Health Division, OECD Directorate for Employment, Labour and Social Affairs
In 2010, the OECD’s influential report, Fit not Fat:Obesity and the Economics of Prevention, warned about the rapidly rising challenge of obesity and its consequences for our health.
Nearly a decade later, the situation has unfortunately not improved enough. Our new data released today (http://www.oecd.org/health/obesity-update.htm) show that the obesity epidemic has spread further, even though this has happened at a slower pace than before. Today, over half of all adults and nearly one in six children are overweight or obese in the OECD area. In the United States and Mexico, one every three adults is obese (see our chart). Social disparities persist and have increased in some countries. Less-educated women are two to three times more likely to be overweight than those with a higher level of education.
Obesity rates have grown rapidly in England, Mexico and the United States since the 1990s. The outlook for the future is worrying, as new projections show a continuing increase of obesity, if no significant change occurs. Obesity rates are projected to increase at a faster pace in Korea and Switzerland where rates have been historically low.
There are many reasons why we must tackle obesity. Obesity is a key risk factor for numerous chronic disease, such as diabetes and cardiovascular disease. The failure of health systems to tackle obesity leads to millions of deaths and disability. This also damages our economies. Obese people are less likely to be employed than normal-weight people. They are less productive at work due to more sick days and fewer worked hours, and they earn about 10% less than non-obese people (OECD/EU (2016), Health at a Glance: Europe 2016 – State of Health in the EU Cycle, OECD Publishing, Paris. http://dx.doi.org/10.1787/9789264265592-en.)
The good news is that much of this is preventable, as OECD work shows. Comprehensive policy packages, including school-based and worksite interventions, interventions in primary care settings, and broader regulatory and fiscal policies can address obesity effectively. A number of countries have recently implemented policies, ranging from tax measures (e.g. Belgium, Chile, Finland, France, Hungary, and Mexico) and subsidies to encourage active commuting instead of cars (e.g., Canada and France both at subnational level), to prescription of physical activity (e.g., France, Sweden), reformulation of food products (e.g., Canada, Chile, Korea, UK, Industry on its own) and change in portion sizes (e.g., France, Sweden, Turkey, UK, New York City ).
In the past few years, new policies to fight obesity have emerged, including communication. Improving nutrient information displayed on food labels through easy-to-understand symbol that is placed in front of pre-packaged food products can help consumers make healthier food choices. These symbols exist in Australia, Chile, Denmark, England, France, Iceland, Korea, Lithuania, New Zealand, Norway, and Sweden. Health promotion campaigns have also been spread through social media. Examples of health-promotion-dedicated website, mobile apps and online tools to help people change their behaviours can be seen in Chile, Estonia, England and the Netherlands. Some countries have reinforced the regulation of marketing of potentially unhealthy foods and sweetened beverages directed at children and young adults. Chile, Iceland, Ireland, and Mexico, for example, ban advertising of foods and beverages on television and radio during peak children audience hours. Other bans apply in schools (e.g., Chile, Spain, Turkey and Poland), in public transport (e.g., Australia) and in theatres (e.g. Norway). While the impact of these polices has not been fully evaluated yet, early evidence shows they empower people to make healthier choices, and can also affect food manufacturers’ behaviours.
These are just some examples. Most OECD countries are now using simultaneously complementary policy tools and creating synergies to promote healthier lifestyles. But there is no room for complacency. OECD countries on average still allocate only around 3% of their health budgets to public health and prevention. Addressing obesity requires investment, and comprehensive policies that target broad social and environmental determinants. Crucially, it requires strong leadership and political will.
Sassi, Franco (2010) “Fighting down obesity” OECD Observer No 281, October http://oecdobserver.org/news/fullstory.php/aid/3339/Fighting_down_obesity_.html
Michele Cecchini, OECD Health Division
Not so long ago, catching pneumonia with a bloodstream infection meant almost certain death: 90% of patients with this condition died. The discovery of penicillin by Sir Alexander Fleming in 1928 changed everything. Now more than 90% of patients with such a disease survive and many of the achievements of modern medicine are intrinsically based on our ability to prevent and cure infections. In addition, the prevention and cure of hospital-acquired infections have allowed the introduction of complex medical interventions such as organ transplantations, advanced surgery, and care of premature neonates.
All these medical achievements may be swept away by antimicrobial resistance (AMR). Microorganisms can learn how to withstand attacks by drugs. By using antimicrobials incorrectly, we are helping them to do this quicker than they would do on their own. At the OECD, we have calculated that about 50% of all the antimicrobials prescribed by healthcare facilities in our member countries do not meet prescription guidelines. In healthcare services such as long-term care facilities and general practices up to 70% and 90% respectively of antibiotics may be prescribed for inappropriate reasons.
The extensive use of antimicrobials in high-density livestock agriculture and aquaculture is further sustaining the growth of AMR, particularly because, worldwide, up to 70% of antimicrobials are given to animals, often for no other reason than to make them grow more quickly.
The health and economic consequences of AMR are significant but will become enormous if no action is promptly put in place. The report produced by Jim O’Neill and his team provides an idea of what may happen if we do not take action soon. According to their estimates, up to 10 million people worldwide may die by 2050 due to six common diseases for which resistance is growing. This figure becomes even more significant (and alarming) by considering that many common infections, such as the main cause of community-acquired pneumonia, are not included in the analysis.
Healthcare budgets and the whole economy may be also put under stress. Patients developing resistant infections are more difficult to treat and we calculated that each patient costs up to an additional 40,000 USD due to increased medicalisation and time spent in hospitals. This figure is likely to double once indirect costs (e.g. absence from work) are taken into account.
The main issue now is to assess what we can all do to address AMR. The OECD Health Division is joining forces with our colleagues in the Directorate of Trade and Agriculture and with the Directorate of Science and Technology to provide sound evidence on the most effective and cost-effective policy options to tackle AMR. During the 2015 meeting of the Health Minsters of G7 countries, the OECD put forward five recommendations to best address AMR and its associated health and economic burden. In particular we believe that AMR can be successfully tackled only by:
- Strengthening existing surveillance and monitoring systems. Countries should further develop their surveillance systems to monitor AMR in the community setting (as opposed to hospitals) and to increase the number of microorganisms covered. We also need better information on antimicrobial prescribing practices.
- Adopting a globally agreed set of measurable targets on AMR incidence and efficient antibiotic use. Measurement of these targets should be integral part of a continuous evaluation processes.
- Strengthening ongoing efforts to rationalise antibiotics use and prevention of AMR spread in the human and livestock sectors. Rational utilization of antimicrobials includes both decreasing inappropriate use and ensuring access to high-quality drugs when needed. Successful and efficient interventions should be upscaled at the national level and across countries.
- Fostering the research and development of new antimicrobial therapies. Investments to develop new antimicrobials should be delinked from expected sales through appropriate economic incentives. Knowledge-sharing, for example, through global research platforms, should be encouraged as a cost-effective approach to research and innovation.
- Increasing coordination between partners to upscale efforts into a true global action. Countries’ action plans should be designed to reflect international standards and by adopting a ‘one-health’ approach. Coordinating strategies and best practices with other key partners would offer an opportunity to upscale efforts in an efficient fashion.
The final report of the Review on AMR led by Jim O’Neill discusses ten specific interventions that the UK and other countries should put in place to tackle AMR. Such actions are very much aligned with the five-pronged approach that we propose and with the WHO Global Strategy for Containment of AMR. The next step is to tailor these actions to the specific context and challenges of the different countries. The OECD can provide a forum where governments can discuss, develop and coordinate new strategies for prudent antimicrobials use in human medicine and agriculture as well as coordinate common strategies to incentivize the research and development of new antimicrobial therapies.
The OECD is putting in place a comprehensive programme of work on AMR, ranging from identifying the most cost-effective strategies to tackle AMR in humans to curbing unnecessary antibiotic use in agriculture. Some of the early results of this work, specifically on promoting the rational use of antimicrobials in humans, will be discussed during the 2017 OECD Health Ministerial meeting. OECD is ready to stand next to Member Countries and other key partners to move forward in the fight against AMR.
Antimicrobial Resistance in G7 Countries and Beyond G7 Health Ministers Meeting, Berlin, 8 October 2015
Antimicrobial resistance in G7 countries: OECD Policy Brief
Jim O’Neill, Commercial Secretary to the UK Treasury
After I was appointed chair of the Review on Antimicrobial Resistance, one of the first questions I set out to answer was what would be the impact if no steps are taken to tackle rising resistance. While we can never know exactly what would happen in the future, I felt that any debates about the cost or difficulty of dealing with resistance should be informed by the far greater costs of inaction. Already resistant infections are estimated to kill at least 700,000 people a year, and in the United States alone they cost 20 billion USD in additional healthcare costs. We hired the consultants KPMG and RAND to examine what would the world look like in 2050 if we did not control resistance and to compare this to what would happen if resistance was tackled properly.
They both took current levels of hospital acquired infections for klebsiella pneumoniae, e. coli and staph aureus, as well as total infection rates for TB, HIV and Malaria, and examined what would happen if resistance rates in these areas rose to 40 percent. This would mean that the first line treatment would fail 40% of the time. This figure was chosen as it was similar to the rates of k. pneumoniae that are resistant to carbapenems in parts of southern Europe, it is also similar to rates found for methicillin resistant staph aureus (MRSA) and multidrug-resistant TB (MDR-TB) in some parts of the world. As part of their research they presumed that a person with a resistant infection in the future would have the same outcome chances as someone today who gets a resistant infection, the levels of resistance would simply rise. They also presumed that rates of hospital acquired infections would double as people would carry the infections for longer making it easier for them to spread.
What the researchers found, using the above assumptions, is that if we do not take the appropriate steps to stop drug-resistant infections, the death toll could rise from 700,000 today to 10 million by 2050. This would mean that a person would die every three seconds from these six drug-resistant infections, and more people would die than are currently killed by cancer. The consequences of inaction would therefore be huge. KPMG and RAND, then fed these deaths into an economic model for what the world would look like by 2050; similar to the model that I used to make my BRICs prediction 15 years ago. The only change they made in their standard assumptions was that people who would die of AMR would no longer be able to work and consume goods. They ignored the impact of people being sick for longer, the indirect costs such as surgery being more complicated, the healthcare costs on society, the disruption to a family that can be caused by illness, and anything else that could cause productivity to change from resistant infections. Despite these conservative assumptions they found that over the next 35 years resistance would knock 100 trillion USD off the world’s production if we do not act to stop AMR. To put that in context that is more than the UK is expected to produce between now and 2050, and more importantly is far greater than the cost of tackling the problem.
Last week I had the pleasure of releasing the Review on AMR’s final report, where I highlighted ten interventions that the world needs to take to tackle resistance. The most important four being: first, to introduce rapid diagnostics so that doctors know whether or not a patient needs an antibiotic before prescribing them. Second, we need public awareness campaigns so that people know what resistant infections are and how to prevent them. Third, we need to find better incentives for people who come up with new drugs so that it is profitable; there has not been a new class of antibiotics since the 1980s. In order to tackle drug resistant infections we need to change that. Finally, we need reduce the amount of antibiotics we give out in agriculture. At the moment some farmers give out antibiotics to healthy animals so that they grow faster, and the whole of society picks up the cost of this though resistance. This is not acceptable; I am therefore delighted to see that the OECD is taking the lead on research into how to curb unnecessary antibiotic use in agriculture. More needs to be done to prevent this.
When costing our interventions my team and I estimated that it would cost up to 4 billion USD a year to avert this global catastrophe. I no longer work in investments, but spending 4 billion USD to prevent a crisis that will cost trillions and kill 10 million people a year is excellent value for money. From pharmaceutical companies to farmers, and from states to individuals, we all need to start acting now before it is too late.
Antimicrobial Resistance in G7 Countries and Beyond G7 Health Ministers Meeting, Berlin, 8 October 2015
Jim O’Neill will be participating in the Meeting of the OECD Council at Ministerial Level (MCM) on 1 and 2 June 2016, under the chairmanship of Chile, with Finland, Hungary and Japan as Vice-Chairs.
It’s the start of civilisation as we know it. The Neolithic Revolution I mean. That period around 10,000 years ago when we moved from hunter-gatherer to agricultural societies. But why did we bother? After all, hunting and gathering was quite a nice life, especially for the hunters, who probably worked less than 15 hours a week (otherwise they’d have killed everything that wasn’t likely to kill them first), leaving most of the responsibility for the groceries to the women and children doing the gathering. The answer, my friends, is demon drink.
Alcohol was discovered by Stone Age layabouts who saw birds and small animals getting hammered after eating too much fermented fruit and decided they’d like to stagger around banging into trees and telling women they’d never met before they loved them. But as Patrick McGovern explains, that meant getting a steady supply of fermentables, so little by little they learned to grow cereals, and were using them for brewing beer long before developing the far more complicated process of baking bread.
By the time writing was invented, sources from across the planet suggest that drinking was a part of daily life. And so was excessive drinking and efforts to do something about it. The Chinese made over 40 attempts to ban alcohol in the period from 1400 to 1100 BCE. They gave up, as did the US government three thousand years later. But where empires have failed, the OECD will succeed. Well, maybe not in banning it, that’s not our goal, but in tackling harmful drinking (or “use” as the experts say, leaving non-experts wondering if there’s something to those stories about alternative ways to get alcohol into your body).
Tackling Harmful Alcohol Use: Economics and Public Health Policy published today looks at trends in how much alcohol is being drunk, who’s drinking it, where, and in what beverages. Average consumption is now just over 9 litres of pure alcohol a year. When one of my journalist colleagues translated that into a more understandable beers a year, around 180, he revealed a generational split in the office: the youngsters were appalled, the adults unimpressed. That’s at odds with one finding in the report I’ll come back to below.
The bad news for the drinks industry is that for the OECD countries as a whole, per capita alcohol consumption has declined slightly over the past 20 years (down 2.5%). The good news is that now that women and children don’t spend so much time gathering, they’re drinking more. For instance, during the 2000s, the proportion of children aged under 15 who‘d never had a drink in their life fell from 44% of boys to 30%, and, in a remarkable victory for gender mainstreaming, from 50% to 31% for girls.
In more news, you can now buy Hello Kitty beer. That’s not to say the industry is targetting kids. You’d have to be particularly cynical to imagine that the goal of promoting fruit-flavoured alcopops and other mixes in cute packaging is to overcome young people’s dislike for the taste of alcohol rather than to get them to eat fruit.
What about women? When you hear about booze-fuelled lifestyles, parent-teacher associations are certainly not what comes to mind. But as this report on women drink-drivers points out, alcohol is everywhere for middle-class women, especially wine – at those school events, on nights out, and, increasingly, on nights in alone. That’s far from the stereotypical image of a woman with a drinking problem as a working-class girl slumped on the pavement on a Friday night clutching a bottle of vodka.
Tackling Harmful Alcohol Use highlights this unexpected frequency of risky drinking according to class and sex. While people with more education and a higher socio-economic status are more likely to drink than the average, risky drinking is more common in middle-class women and working-class men.
I was surprised to see how many of those risks and harms there are. Alcohol is responsible for 1 in 17 deaths. You probably know about its contribution to liver disease, but it can also be involved in cancers, cardiovascular diseases and various other conditions. Indirectly, it causes death and injury from traffic accidents and violence. And not only the drinker is affected. A study by the Australian Foundation for Alcohol Research and Education found that nearly two-thirds of respondents had experienced harm from others’ drinking, and that: “Over a million children (22 per cent of all Australian children) are estimated to be affected in some way by the drinking of others”.
There’s an economic price to pay, too. The US Centers for Disease Control and Prevention estimate that excessive drinking cost the country $223.5 billion last year, “or about $1.90 per drink”, with almost three-quarters of that due to binge drinking.
So how do you tackle binging and other forms of dangerous drinking? Most drinkers would see health benefits from reducing their consumption, but that has to be set against other benefits from not changing, in their social life for example, so you may have a hard time convincing them. The more so given how much the industry spends on persuading people to drink. In the US, drinks manufacturers told the Federal Trade Commission they spent $3.45 billion on marketing in 2011.
You could target the heaviest drinkers first. They are the ones who cause the most harm and are also the most receptive to alcohol adverts. There are few strategies in place to do this though, but doctors could be made more aware of the issues. Raising the price is an effective way to cut consumption, and strictly enforcing the laws on drink-driving reduces accidents. Stricter advertising regulations and restricting the number of places you can buy alcohol could help as well. In other words, reduce alcohol’s availability, affordability and attractiveness.
Failing that, you could try the Aztec diet. They strangled drunken plebs in public, and nobles in private.
Declaration of interest: I helped to write Tackling harmful alcohol use, but the views expressed here are entirely my own and do not necessarily represent those of the OECD, its member governments (or the drinks industry).
Summer is just around the corner, and the newsstands are suddenly covered with magazine covers promising to get you trim and toned for the beach. But, this year, squeezing into the swimsuit will be harder than ever. Why? We’re getting fatter.
Figures released by the OECD earlier this week show that most adults in the developed world are now overweight. More worrying, almost one in five are not just overweight but obese. In the United States, Mexico and New Zealand, that proportion rises to one in three. (If you’re wondering about your own body, you can estimate your Body Mass Index, or BMI, here. Among adults, a BMI of 25 or over means you’re overweight; 30 or over means you’re obese; and 40 or over means you’re severely obese.)
The problem is not just confined to rich countries. Worldwide, not a single developed or developing country has managed to turn the tide on obesity over the past three decades, according to findings from the Global Burden of Disease Study reported this week. Over that period, the proportion of overweight or obese adults worldwide rose about 8 percentage points to just under 37% for men and to 38% for women, and there were also big rises among children and adolescents.
So, the obesity epidemic shows no signs of going away, although there are signs that it’s levelling off in some rich countries. According to the OECD data, obesity rates are stabilising, or growing only very slowly, in around six OECD countries and regions, including the U.S., Spain and Canada. But in others, such as Mexico and Australia, they’re still galloping along.
They also look to be rising among people on the bottom end of the economic ladder, who tend to suffer higher rates of obesity in any case. The Great Recession didn’t help: In a number of countries, there are signs that families cut their spending on food, typically by replacing fresh produce with highly calorific but less nutritious processed foods – goodbye salad, hello cheeseburger.
For a number of reasons, the global rise in obesity is increasingly seen as a serious issue for public health policy. For one thing, obesity – just like cigarettes and alcohol – is a killer. People who are severely obese cut eight to ten years off their lives, while every extra 15 kilograms of weight increases the risk of early death by about 30%.
Another reason is that it’s clear that people don’t have the information they need to make good decisions about food. That’s not too surprising. We live, after all, in a world filled with food designed, quite literally, to make us go on eating – try eating just one Pringles chip, for instance. We are also bombarded by endless, and often contradictory, advice on what and what not to eat. Right now, it seems, sugar is replacing butter as Public Enemy No. 1. Neither, of course, is a “super-food” – a list of comestibles that promises to make us slim, sexy and smart and that now includes everything from blueberries and pomegranates to vinegar, cauliflower and even dandelions.
It’s no wonder people are confused.
Recent years have seen a swathe of policy initiatives to try to tackle the obesity epidemic, and a range of approaches is being taken. One of the most popular – and controversial – involves introducing higher taxes on fatty or sugary foods. Designing these taxes is not easy, however. Denmark, for example, introduced a “fat tax” on foods containing more than 2.3% saturated fat, but rescinded it after not much more than a year amid pressure from retailers, producers and politicians.
Other initiatives include better food labelling. The UK, for example, has introduced a voluntary “traffic-light” system to inform consumers about the levels of salt, sugar and fat in their food. Food advertising is also being targeted in some OECD countries: As part of its ambitious National Strategy on obesity, Mexico has banned TV advertising of potentially harmful foods during hours of the day when children are likely to be watching. Financial and other incentives are also being tried out in some OECD countries to encourage people to lose weight.
Many of these initiatives are fairly recent, so it will take time before their impact becomes clear. No doubt, some will work better than others – indeed, some may not work at all. However, there is good evidence to show that public policy really can have an impact on major health issues. Take smoking – down almost a third in just two decades in rich countries and, with luck, likely to fall still further.
OECD work on the economics of prevention
Tomorrow, November 19, is World Toilet Day and to celebrate I thought I‘d tell you how I fooled God when I was about four. I was playing outside and needed to go to the toilet, urgently, but realised I wouldn’t make it home in time and guessed that peeing outside was probably a sin. But in my personal theology, God was like a geostationary satellite observing the Earth from high in the sky, so I figured that if I hid under the overhang of a roof while I did the dastardly deed, I’d be OK. My relief was short-lived though as I saw with horror that I would be betrayed by the trickle seeping out into the open and He’d see me as soon as I quit my hiding place. So I edged round the building, back to the wall, then casually strolled away on the other side, whistling innocently, and leaving the Almighty to solve the mystery of the phantom pee.
It’s amusing now, but for hundreds of millions of people the world over, not being able to go to a toilet still has far more immediate consequences than divine retribution. 2.5 billion people don’t have access to a clean and safe toilet, so they improvise. For 1.1 billion people, the solution is open defecation, a practice that poses a major threat to human health, but also to economic and social development, as well as being an affront to human dignity.
As the 2010 Millennium Development Goals Report points out, indiscriminate defecation is the root cause of faecal-oral transmission of disease, which can have lethal consequences for young children. In this article, we gave the figures for what that means: in any given week, around 30,000 children under the age of five will die from water-related diseases, that’s one every 20 seconds. Unsafe water now kills more people than all forms of violence, including war, with diarrheal diseases claiming 1.8 million victims a year and causing more deaths in children under 15 than the combined impact of HIV/AIDS, malaria, and tuberculosis.
Sanitation is also a gender issue. Women and girls have a greater need for privacy than men and boys when using toilets and when bathing. Inaccessible toilets and bathrooms make them more vulnerable to rape and other forms of sexual violence, especially if they have to walk long distances at night.
If they live in rural areas of developing countries, they also face a greater risk of being attacked by animals in the bush because women and girls tend to move quietly in order to be discreet. Snakes and other animals are then not scared away and are more likely to be surprised by the women’s presence and bite them. The solution is often to use “flying toilets” – human waste disposed of in plastic bags thrown into the open, a double source of pollution from both the wastes and the plastic bags.
Women and girls also have a much greater need for privacy and dignity when menstruating, and the taboos surrounding this in many cultures make the problems worse. Separate toilets for girls in school, for example, mean more girls are likely to attend classes in the first place, and more girls are likely to stay after puberty to complete their education. The World Toilet Day website puts it like this: “In many countries, girls stay home during their menstruation days because the absence of a safe place to change and clean themselves makes them feel unsecure … Besides the emotional stress, poor menstrual hygiene often leads to health problems such as abdominal pains, urinal infections and other diseases.”
Catarina de Albuquerque, UN expert on the right to safe drinking water and sanitation agrees: “Women and girls place higher value on the need for a private toilet than men, and thus are often willing to devote household resources to gaining such access. However, women are rarely in control of the household budget, and access to sanitation remains a low priority in many parts of the world.”
Unless policies and practices change significantly, the number of people without access to basic sanitation is expected to grow to 2.7 billion by 2015 and the world will miss the MDG target of halving the proportion of people without access. Almost 1.5 billion will still not have access to improved sanitation in 2050. The consequences for water quality are severe and made worse by the fact that progress in treating wastewater does not always keep pace with progress in collecting it, resulting in new sources of nutrients and pathogens being dumped untreated.
Issues related to water and sanitation are a priority for the OECD and you can find information here on our World Toilet Day webpage on a range of topics, including health impacts. A number of people working at the OECD are also involved through our War on Hunger Group. For example, last year the Group funded a project in Mozambique to reduce diarrhoea by at least 25% in children under the age of five by training in hygiene and changing current practices. The project also improves access to drinking water and to sanitation through the construction of protected water points and 60 family latrines. It contributes to the sustainability of the protected water points by establishing local maintenance services.
Colleagues from the War on Hunger Group told me that you need to accompany the building programme with education. Their experience suggests that, in some countries, the toilets are used as a much appreciated shed or store room, and people continue to go to the fields. The problem is the cleaning, which in some places can only be done by certain (often stigmatised) groups, such as untouchables in India.
If you’re wondering what you can do, Matt Damon has an idea:
The War on Hunger Group helps people tackle a number of problems that we in the developed countries never have to worry about, for example the fact that air pollution from cooking will soon kill more people in developing countries than malaria, tuberculosis or HIV/AIDS. This article from the OECD Observer describes how WHG contributing to a solution
* Insert your own joke about making a splash, flushed with success, etc
If I proposed the building of a large industrial enterprise that would lead to the early death of around 40,000 people, I strongly doubt that the idea would survive the evening news. Yet air pollution from diesel-fuelled road transport kills an estimated 40,000 people a year in France – that’s roughly ten times the number of people who die in road accidents. Unlike a large, easy-to-target industrial plant, the culprits are millions of mobile combustion sites that whiz around carrying the very people who would oppose my large plant.
At global, regional and national levels, air pollution poses a major challenge to public health. The OECD’s Environmental Outlook to 2050 projects that between now and 2050, the number of people who die globally from exposure to particulates will more than double from 1.5 million to 3.5 million. Not all of that can be attributed to road transport emissions. But it is a very significant contributor and is getting worse in emerging economies too as rising affluence brings with it increased personal mobility.
Increased mortality also carries a heavy economic cost. That’s obvious just from anecdotes. It cannot be good for Beijing’s economy that significant numbers of highly skilled people want to leave or not come there in the first place because of the risk air pollution poses, particularly to their children who are growing up in a soup of particulate and noxious gases. But these economic costs are quantifiable and they are serious in most developed economies.
One of the tools used to quantify costs is the Valuation of Statistical Life (VSL) which puts a cash value on a human life. Many people don’t like politicians quantifying life or death trade-offs in monetary terms. However, not making such judgments doesn’t avoid the trade-offs – it just hides them from view. An OECD meta-analysis of VSL estimates suggests a figure of €3.5 million per statistical life in the EU27 for example. This is higher than the €1 or €2 million used by the EU Commission in analyses of policies to limit air pollution, and implies that some policies excluded by the EU may in fact be cost-effective.
How could policy interventions be improved so as to reduce air pollution from road transport and improve human health?
First, apply the policy instruments as close as possible to the problem you are trying to tackle. For CO2 emissions, the policy instrument of choice is a tax related to the carbon content of the fuel since CO2 emissions are directly linked with that carbon content. For NOx and other exhaust pipe pollutants, the link with the amount of fuel used is not so direct. The way the vehicle is driven and the type of engine technology is determinant. Similarly, noise and congestion are not directly linked to fuel-use. For all these social costs, the ideal policy instrument is road user charges that vary with the place and time of driving, and with the environmental characteristics of the vehicles.
For local air pollutants, any charging or taxing regime should use real world emissions measures, not artificially optimistic test scenarios. There is a large and widening gap between the emissions standards that countries are imposing and emissions under normal driving conditions. There may have been no real improvement in NOx emissions from diesel vehicles in European countries since the mid-1990s and while there has been some reduction in particulates emissions, there has been an increase in the amount of NO2 from diesel vehicles.
Almost all OECD countries apply much lower tax rates on diesel fuel than on petrol. There is no conceivable environmental justification for this. Diesel is responsible for more local air pollutants such as NOx and PM than gasoline – although volatile organic compound (VOC) emissions from petrol-driven vehicles also can contribute to smog problems in some places. On the CO2 score, diesel is also more polluting, causing higher emissions per litre fuel than petrol. The fact that you can drive further on a litre of diesel than a litre of gasoline means the benefits of the greater fuel efficiency are entirely captured by the private driver. And to the extent that high fuel efficiency makes driving cheaper, there is an incentive to drive further – and there is evidence that this tends to be the case with the result that CO2 emissions are not reduced.
An increasing number of cities apply congestion charges, but nationwide road-charging systems are only used in Switzerland, and only for heavy goods vehicles. Some countries have motorway charging systems for heavy goods vehicles that include environmental components, and France and Italy for instance have infrastructure funding systems for all vehicles on their motorways. Given that coverage is partial, traffic can simply divert to non-charged routes, thus redistributing the environmental load.
If the current patchwork quilt of measures is far from ideal, how in a pragmatic way might it be improved? If a road pricing system is deemed unfeasible for the present, the best approach would be to maintain the current system of fuel taxes but announce the gradual phase-in of a significant increase in tax rates on diesel fuel. After, say, 7-10 years, there would be a significantly higher tax on diesel than on petrol. Such a timeframe would give both car owners and manufacturers time for the stock of vehicles to turn over to reflect the new pollution priorities.
In principle this could meet the bulk of the pollution reduction objectives that worry people. If taxes on motor vehicles were maintained – say for fiscal reasons – then it would make sense to take account of local air pollutants in the calculation of tax rates, as Israel has done.
Finally, any package of measures should involve a revision of emission standards to better reflect real-world driving.
Simon Upton was one of the key speakers at the EU’s Green Week conference held in Brussels on 4-7 June