Economic Lever to Curtail Air Pollution

The mechanisms of economic development in Iran are not focused on reduction of air pollution.

That is the primary complaint of an editorial authored by business journalist, Ali Farahbakhsh, and published by the Persian economic daily Donya-e-Eqtesad.

Excerpts of the writeup are as follows:

According to a joint report by the World Bank and the Institute for Health Metrics and Evaluation, an estimated 5.5 million lives were lost in 2013 to diseases associated with air pollution, causing human suffering and impeding economic development.

While pollution-related deaths strike mainly young children and the elderly, premature deaths also result in lost of income for working-age men and women. The report finds that the aggregate cost of premature deaths was more than $5 trillion worldwide in 2013.

The loss of life is tragic and its cost to the economy is substantial. Air pollution in the Iranian capital, Tehran, in recent weeks is also to be blamed for a string of deaths.

Sadly, the mechanisms of economic development in Iran are not focused on reducing air pollution. On the contrary, they provide incentives for people to use their own motor vehicles. Fuel subsidy payments and weak public transportation system lure people into using road-based, privately-owned vehicles.

Inflated prices of cars due to high manufacturing costs of local vehicles and tariffs imposed on imported cars on the one hand and the low prices of fuel on the other hand drive up high fixed costs of owning a car and pushes down the variable costs.

Therefore, Iranian car owners tend to hold on to their cars as long as possible. They drive their cars five times more kilometers than the average global mileage. Gasoline consumption in Iran has averaged around 75 million liters a day this year. It even hit 100 million liters on certain days.

Highway construction, which is relentlessly pursued in metropolitan cities—particularly Tehran, is a thing of the past in the world. Such policies only step up demand for passenger cars. Highways might provide a short-term relief from traffic congestions but in the long run, they bring about the ironic effect of increasing inner-city traffic.

In fact, Iran’s transportation system has been designed for people using their own cars, rather than public vehicles.

To curtail air pollution in urban areas, major cities across the world have made the use of private cars on city streets very expensive. And it is simple, easy and economical to use public transportation in these cities.

Iranian officials could learn a lot from the systems that Japan and Singapore have put in place to reduce the economic costs of air pollution.

Tokyo slaps pricey parking rates on car owners (€400 a month). This is while Tokyoites cannot buy cars without parking space. Only 18% of Tokyo residents own cars.

Electric public transportation accounts for 95% of all journeys made within the city. Japanese youth don’t care about owning a car (they favor smartphones instead).

Also, understanding the economic issues that come with traffic congestion, the government of Singapore has put in place a range of incentives and constraints to limit the impact cars have on the city-state.

There is a system of quotas, registration fees and congestion charges that allow Singapore’s traffic to flow relatively easily 24/7.

By increasing the price of vehicles, the Asian country’s Certificate of Entitlement system restricts the number of people who want or are able to buy a car.

Besides the quota system and additional registration fees that new car owners need to pay, there’s also the Electronic Road Pricing System that discourages drivers from going to certain areas at peak times.