The report calculates the cost to society across the OECD’s 34 members at about US$1.7 trillion, based on the value people attach to not having their lives cut short by cancer, heart disease or respiratory problems. It puts the cost at nearly US$1.4 trillion in China and nearly US$0.5 trillion in India.

Although air pollution in OECD countries has fallen in recent years, it has increased in China and India as rapid growth in traffic has outpaced the adoption of tighter emission limits. The switch to more polluting diesel vehicles in many countries in part to combat climate change has also added to pollution effects, threatening to arrest the downward trend in emissions from road transport in OECD countries, according to the report.

Over the five‐year period from 2005 to 2010, there was an overall increase of about 4% in the number of premature deaths globally caused by outdoor air pollution—with an improvement in the OECD world being offset by a larger deterioration in the rest of the world.

These figures, the report notes, are based on new technologies for measuring pollution and improved analysis of health data, are far higher than those from previous studies of premature death and illness from air pollution. Calculating the economic cost of these health impacts, and how much is due to air pollution from road transport, requires estimating the value of lost lives or lost quality of life in the case of illness.

While there is a standard method for calculating the cost of lost life, there is not one for loss of health. The OECD study adds a 10% margin for loss of health (morbidity) to the mortality cost, based on the best available evidence in recent studies.

Other findings of the report include:

• The number of deaths due to outdoor air pollution fell by about 4% in OECD countries between 2005 and 2010, while the number of years of life lost fell even further. But while 20 of the 34 OECD countries achieved progress, 14 did not.

• The number of deaths due to outdoor air pollution in China rose by about 5%, although years of life lost increased by only about 0.5%. China has arguably succeeded in slowing the increase in the effect of air pollution on health, since a reduction in exposure to pollution will have a greater effect on years of life lost than on the number of deaths.

• India registered an increase of about 12% in the number of deaths and about 3% in years of life lost. Although the number of deaths in India is only just over half the number in China, the trend in India is increasing faster.

The report makes a number of recommendations, including:

• Continue using of the standard method for calculating the cost of mortality—the Value of Statistical Life (VSL) as derived from individuals’ valuation of their willingness to pay to reduce the risk of dying.

• While indicative estimates suggest that morbidity would add 10% to the mortality cost figures, work is needed to complete a standard method of calculating morbidity costs in a manner consistent with the standard method for calculating mortality costs.

• A defensible calculation of the economic cost of the health impacts of air pollution must base itself on the new body of epidemiological evidence made possible by recent innovations in monitoring and modelling technology.

• A defensible calculation of the economic cost of the health impacts of air pollution from road transport must base itself on sector‐specific evidence consistent with the new body of epidemiological evidence. This necessitates a renewal of the sector‐specific evidence base. In the meanwhile, it is possible to provide indicative estimates only of road transport’s share in the overall cost.

• Governments should maintain strong regulatory regimes, particularly strict vehicle standards. Given the size of the economic cost of the health effects of air pollution, the benefits of reducing that burden could easily outweigh the monetary cost of investments in more ambitious programmes to reduce pollution.

• Governments should also rethink their approach to appraising policy moves, such as the regulatory and tax settings that facilitated the shift to diesel vehicles. Importantly, there is also a need to ask how it is that the appraisal process has hitherto failed to secure the passage of a range of policy proposals for example in relation to public transport that could have reduced air pollution and how to rectify this in future.

The report also supports tightening emission standards, expanding urban bicycle-sharing and electric car programs and extending road charge schemes to reduce congestion.

This report, and other work conducted at the OECD, also suggests that some public policies are part of the problem. I highlight in particular those policies that favor the use of diesel over gasoline in vehicles. Although emission standards have been improving, diesel vehicles are still the source of most of the harmful air pollutants generated by road transport—as much as 80 to 90% in some countries. Despite this, in many countries, the majority of new cars entering the market today are diesel vehicles. This is often because the taxes on vehicles and fuels favor diesel. In fact, Switzerland, the United Kingdom and the United States are the only countries where the taxes on diesel are higher than those on gasoline.

Taxing diesel less than gasoline does not make sense environmentally or economically. So removing incentives that favor diesel—perhaps phased over a few years—is one practical step that many countries could take to reduce the health impacts from vehicle emissions.

Our report highlights a range of other possible responses too. For example, policymakers could consider a further tightening of vehicle emission standards. They could develop more comprehensive approaches for reducing air pollution from all sources in urban areas; and they should do more work to identify measures that could help mitigate the impact of air pollution on vulnerable groups, such as the young and the old.

—Angel Gurría

Resources

• OECD (2014), “The Cost of Air Pollution: Health Impacts of Road Transport,” OECD Publishing. doi: 10.1787/9789264210448-en