OECD calls for policy change to tackle staggering cost of road transport

The Organisation for Economic Co-operation and Development has called for the removal of incentives for diesel and more stringent standards for vehicle emissions, following a new report that puts the cost of air pollution from road transport at US$3.5 trillion a year

The Organisation for Economic Co-operation and Development on Wednesday urged governments to address the staggering human and monetary cost incurred by road transport by developing more stringent standards for vehicle emissions, removing tax and regulatory incentives that support the use of diesel vehicles, and by actively promoting lower-emission modes of transport. 

In a new report, ‘The cost of air pollution: health impacts of road transport‘’, launched on the opening day of the International Transport Forum (ITF) 2014, the OECD revealed that air pollution caused health problems that costs OECD, India and China some US$3.5 trillion a year and killed 3.5 million people annually. Air pollution, said OECD, has now overtaken lack of sanitation and clean water as a cause of death worldwide.

Road transport is the cause of approximately half the deaths, and half the costs arising from air pollution, said OECD. Its move to put a figure on the human cost of air pollution draws on new data collected by the World Health Organisation, which shows that air pollution kills over 3.5 million people every year -  much more than previously estimated.

The report applies an economic concept called ‘the value of statistical life’, which aggregates people’s responses to the value that people attach to not having their lives cut short by lung cancer, heart disease or respiratory problems, to arrive at the trillion-dollar figures.  

The report shares that people living in OECD member countries would be willing to pay US$1.6 trillion to avoid premature deaths caused by air pollution. China and India peg this cost at US$ 1.4 trillion and US$500 billion respectively, more than all OECD member countries combined.

China also saw a 5 per cent increase in deaths from from outdoor air pollution between 2005 and 2010, while India saw experienced a 12 per cent increase over the same perod.

“There is no environmental justification for taxing diesel less than petrol”, said Angel Gurria, secretary-general of the OECD. “Air pollution is destroying our health and the planet. Phasing out tax incentives on diesel would be a step towards reducing the costs to both, and in fighting climate change”, he added.

Beyond air pollution, José Viegas, Secretary-general of the ITF noted in his opening plenary address that “global economic and political power is shifting towards the east”, with India and China as key protagonists in the global discourse on making road transport cleaner.

Air pollution is destroying our health and the planet. Phasing out tax incentives on diesel would be a step towards reducing the costs to both, and in fighting climate change.

Angel Gurria, Secretary general, OECD

In the opening plenary of the three-day conference, Viegas identified demographic changes such as urbanisation and ageing populations, climate change and the increasing role of technology in our lives as emerging trends that would influence the future of global transport systems.

These trends set the tone for rest of the conference, themed ‘Transport for a Changing World’, and underpinned the discussions on the first day of the event. The annual conference is organised by the International Transport Forum, an intergovernmental organisation within the OECD that acts as a think tank for global transport policy. The 2014 summit, held in Leipzig, Germany, brings together over 1,000 policy makers, business leaders, international organisation representatives and academics to discuss transport challenges and devise long-term solutions.

Experts at the summit said that transport planners and policymakers should adopt people-centric planning, a shift to low carbon transport alternatives, and the strategic use of big date to tackle challenges such as catering to the needs of rapidly growing, ageing and urbanising populations; reducing greenhouse gases and adapting to climate change; and managing the surge in car usage in emerging economies.   

Helle Søholt, Founder and CEO of the Copenhagen-based Gehl Architect, shared that initiatives such as closing off roads to motor traffic, reducing available parking space in the city, and improving bicycle infrastructure had contributed to Copenhagen becoming a “city for all”, a claim that is substantiated by the city’s high ranking on global liveability indexes.

The increasingly powerful role of big data –  extremely large data sets that only special software can process – in managing transport challenges such as traffic congestion, road safety and improving public transport infrastructure was discussed extensively policymakers, technical experts, and entrepreneurs.

For example, Singapore’s minister for transport, Lui Tuck Yew, shared during a panel session how big data was used to lay the groundwork for a successful public transport strategy in Singapore. Data on the disparity between demand and supply of services motivated the city-state’s Bus Service Enhancement Programme, which has seen the introduction of about 40 new bus services and 800 buses in Singapore. Big data was also at the heart of WiFi@MRT, an initiative to install wireless internet at train platforms to distribute passenger crowds evenly, and enable targeted messages to be sent to passengers via WiFi.

“This is a way to not only inform, but to engage citizens”, said Lui. “It is about packaging data and sharing it in a way that will be the most useful. Environmental sustainability is one reason for doing this, but the other key reason is to give people more options, based on available information. When people are able to make informed decisions, I hope we have satisfied citizens who feel like they are being better engaged”.

Big data could also feed into policymaking efforts to create more relevant, effective transport policies and develop newoperational models that would address future transport challenges, said experts.

Sean O’Sullivan, managing director of Carma, a carpooling firm based in US and Ireland, shared how big data fuelled collaborative consumption initiatives (such as carpooling), which are new alternatives to traditional transport models. For example, data on carpooling could be used to offer rebates on road tolls to users who car-pool, suggested O’Sullivan.

Ultimately, the panel of experts on big data agreed that improvements in global transport processes hinged on policymakers framing issues accurately, and then applying relevant tools such as big data to resolve these issues.

“People are increasingly moving to cities, and there is no room to build new roads or distribution systems”, said panellist Ralph Menzano, executive director of transportation industry solutions, Oracle. “We need data to manage this growth; the use of data is crucial to make sure cities remain viable and thriving.”

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