The Motor vehicle air pollution and the tax response in big cities

Espinoza, Enrique Pintado

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dc.contributor.advisorPark, Jin-
dc.contributor.authorEspinoza, Enrique Pintado-
dc.descriptionThesis(Master) --KDI School:Master of Public Policy,2011-
dc.description.abstractAir pollution is one of the main environmental concerns in urban areas for the adverse health effects on the population. Generally, it increases the risk of respiratory and heart disease in the population, and some pollutants in the air are carcinomas. In 2008 in the Balcksmith Institute World’s Worst Polluted Places report, the urban air quality was listed as one of the world’s worst pollution problems. Lima, the capital of Peru, is a city which air pollution is very high, and motor vehicles are the major source of pollutants. The problem is very complex: the average age of motor vehicles in Lima is 14 years, and in the case of those used for public transportation 56% are older than 20 years, and 91.6% are older than 10 years; there is an excess of 22,000 of motor vehicles for public transportation; and congestion in Lima produce that an average journey from the north and south of Lima be two hours. Regarding the fuel quality it has been improved few years ago, but there is not incentive to use motor vehicles that consume less fuel. The Peruvian government has acted contradictory: on the one hand, it promoted air pollution by making cheaper dirty fuels through taxes, and by allowing the import of old motor vehicles with tax benefits; on the other hand it took some delayed measures to reduce the air pollution problem. The first measure it took was in 1998 banning the content of lead in gasoline (several years after European countries did it). The second measure was taken after 10 years limiting the sulphur content in diesel (the content of sulphur in diesel was 4,000 to 6,000 ppm, while in other Latin American countries it was 350 ppm, and in European countries it was below 100 ppm). The effect of such command-and-control policies had a positive effect, because the content of Sulfur Dioxide and Nitrogen Dioxide in the air of Lima is below the Air Quality Guidelines established by the World Health Organization. However, the content of particulate matter (2.5 and 10 μm) are still above those guidelines. An important notation is that the Peruvian government is not monitoring the content of other pollutants in the air of Lima, and since 2010 it has not monitored the air pollution in one of the most polluted areas: Lima downtown. Therefore, more public policies are necessary to reduce air pollution. Unfortunately, the Peruvian government (the same as most of other governments in the world) uses only regulation to deal with this environmental problem. Nonetheless, taxes have proved in some cities to get excellent results in reducing air pollution. Singapore has an extraordinary experience in the use of taxes and other economic instruments to reduce air pollution: import duties, registration fees, and road charges. London, after a very long political process, applies since 2003 a congestion charge which result has been extraordinary. Many countries in Europe (England, France, and others) apply the excise taxes on motor vehicles based on their emissions. Learning from those experiences, it is proposed to apply environmental taxes for reducing air pollution in Lima. The use of excise taxes on fuel based on their environmental impact, and of excise taxes on motor vehicles based on different factors (type of fuel they use, engine size, technology, age, etc) can be an incentive for people to purchase environmental friendly motor vehicles. The use of motor vehicle property tax in order to make more expensive to keep old motor vehicles, may be useful to reduce the average age of vehicles in Lima, which would reduce the air pollution. Finally, a road charge for the most congested and polluted area in Lima would be an efficient measure to reduce congestion and pollution in such area.-
dc.format.extentx, 79 p.-
dc.publisherKDI School-
dc.titleThe Motor vehicle air pollution and the tax response in big cities-
dc.title.alternativethe case of Lima-
dc.contributor.departmentKDI School, Master of Public Policy-
dc.description.statementOfResponsibilityby Enrique Pintado Espinoza.-
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