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The impact of policies to control motor vehicle emissions in Mumbai, India

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  • Takeuchi, Akie
  • Cropper, Maureen
  • Bento, Antonio

Abstract

This paper examines the impact of measures to reduce emissions from passenger transport, specifically buses, cars, and two-wheelers in Mumbai. These include converting diesel buses to compressed natural gas (CNG), as the Indian Supreme Court required in Delhi, which would necessitate an increase in bus fares to cover the cost of pollution controls. The authors model an increase in the price of gasoline, which should affect the ownership and use of cars and two-wheelers, as well as imposing a license fee on cars to retard growth in car ownership. The impact of each policy on emissions depends not only on how the policy affects the mode that is regulated, but on shifts to other modes. The results suggest that the most effective policy to reduce emissions from passenger vehicles-in terms of the total number of tons of PM10 (particulate matter that measure less than or equal to 10 micrometers in aerodynamic diameter) reduced-is to convert diesel buses to CNG. The conversion of 3,391 diesel buses to CNG would result in an emissions reduction of 663 tons of PM10 a year, 14 percent of total emissions from transport. The bus conversion program passes the cost-benefit test. In contrast, the results suggest the elasticities of emissions from transport with respect to a gasoline tax and a tax on vehicle ownership are -0.04 and -0.10 respectively. As a consequence, it would take substantial increases in the gasoline tax or vehicle ownership tax to produce reductions in emissions similar to the bus conversion program. These results, however, reflect the low shares of cars and two-wheelers in the Mumbai emissions inventory and need not apply to cities, such as Delhi, where these shares are higher.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 4059.

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Date of creation: 01 Nov 2006
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Handle: RePEc:wbk:wbrwps:4059

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Keywords: Transport Economics Policy&Planning; Transport in Urban Areas; Transport and Environment; Roads&Highways; Urban Transport;

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  1. Fullerton, Don & West, Sarah E., 2002. "Can Taxes on Cars and on Gasoline Mimic an Unavailable Tax on Emissions?," Journal of Environmental Economics and Management, Elsevier, vol. 43(1), pages 135-157, January.
  2. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, Cambridge University Press, number 9780521747387.
  3. Eskeland, Gunnar S, 1994. "A Presumptive Pigovian Tax: Complementing Regulation to Mimic an Emissions Fee," World Bank Economic Review, World Bank Group, World Bank Group, vol. 8(3), pages 373-94, September.
  4. Kopits, Elizabeth & Cropper, Maureen, 2003. "Traffic fatalities and economic growth," Policy Research Working Paper Series 3035, The World Bank.
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Cited by:
  1. Takeuchi, Akie & Cropper, Maureen L. & Bento, Antonio M., 2007. "Measuring the Welfare Effects of Slum Improvement Programs: The Case of Mumbai," Working Papers, Cornell University, Department of Applied Economics and Management 127020, Cornell University, Department of Applied Economics and Management.
  2. Rema Hanna & Michael Greenstone, 2011. "Environmental Regulations, Air and Water Pollution, and Infant Mortality in India," Working Papers id:4309, eSocialSciences.
  3. Narain, Urvashi & Krupnick, Alan J., 2007. "The Impact of Delhi's CNG Program on Air Quality," Discussion Papers, Resources For the Future dp-07-06, Resources For the Future.

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