Urban Air Quality Management - World...

WORLD BANK TECHNICAL PAPER NO. 0aO

Pollution Management Series

Worc In progress WTP508for public dlscusslon September 2001

Urban Air QualityManagementCoordinating Transport, Environment, andEnergy Policies in Developing Countries

Masami KojimaM4agda Lovei

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WORLD BANK TECHNICAL PAPER NO. 508

Pollution M1lanagement Series

Urban Air QualityManagementCoordinating Transport, Environment, and

Energy Policies in Developing Countries

Masami KojimaMiagda Lovei

The World BankWashington, D.C.

Copyright © 2001The International Bank for Reconstructionand Development/THE WORLD BANK1818 H Street, N.W.Washington, D.C. 20433, U.S.A.

All rights reservedManufactured in the United States of AmericaFirst printing September 2001123404030201

Technical Papers are published to communicate the results of the Bank's work to the development com-munity with the least possible delay. The typescript of this paper therefore has not been prepared in accor-dance with the procedures appropriate to formal printed texts, and the World Bank accepts noresponsibility for errors. Some sources cited in this paper may be informal documents that are not readilyavailable.

The findings, interpretations, and conclusions expressed in this paper are entirely those of the author(s)and should not be attributed in any manner to the World Bank, to its affiliated organizations, or to mem-bers of its Board of Executive Directors or the countries they represent. The World Bank does not guaran-tee the accuracy of the data included in this publication and accepts no responsibility for any consequenceof their use. The boundaries, colors, denominations, and other information shown on any map in this vol-ume do not imply on the part of the World Bank Group any judgment on the legal status of any territoryor the endorsement or acceptance of such boundaries.

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Permission to photocopy items for internal or personal use, for the internal or personal use of specificclients, or for educational classroom use, is granted by the World Bank, provided that the appropriate feeis paid directly to Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, U.S.A.,telephone 978-750-8400, fax 978-750-4470. Please contact the Copyright Clearance Center beforephotocopying items.

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ISBN: 0-8213-4948-1ISSN: 0253-7494

Masami Kojima is a Senior Energy/Environment Specialist in the World Bank's Oil, Gas and ChemicalsDepartment, Policy Division. Magda Lovei is a Senior Environmental Economist in the World Bank'sEnvironment Department.

Cover photo: China, February 1996. City unknown. Photographer: C. Carnemark. World Bank PhotoLibrary.

Library of Congress Cataloging-in-Publication has been applied for.

Contents

Foreword v

Abstract vii

Acknowledgments ix

Abbreviations and Acronyms xi

Executive Summary 1

Chlapter 1 Environmental Concerns and Priorities in Urban Air Quality Management 11The main sources of air pollution 12Developing a strategy for mitigating air pollution 12Vehicle emissions abatement measures and their cost-effectiveness 14

Using others' experiences: Risks and benefits 14Potential win-zoin measures 15Targeted pollution abatement measures 17

Cross-sectoral coordination of policies 23Vlehicle technology, fuel quality, and related policies 23Targeting gross emitters 24Fiscal policies 24Trade liberalization 26

Greenhouse gas emissions 27Global trends in C0,emissions 27Options for reducing GHG emissions 28

Decisionmaking levels in transport-related air quality management 29

Chapter 2 World Bank Experience with Support for Urban Air Quality ManagementPrograms 31Analytical work 31Nonlending services 32

URBAIR 32Lead phaseout 33Clean transportffuels 34South Asia tzwo-stroke-enginie initiative 35

iii

iv Urban Air Quality Management

Clean air initiatives 35The urban transport portfolio 36

Closed projects 36The active portfolio 36

Other relevant portfolios 39Conclusions and recommendations 39

Annex A Key Air Pollutants 43Annex B Diesel Certification in California 47Annex C Closed World Bank Projects in the Urban Transport Sector 49Annex D Ongoing World Bank Projects in the Urban Transport Sector 51

Notes 53

References 55

Boxes

Box 1. Key steps in developing a pollution abatement strategy 13Box 2. Promoting nonmotorized transport 16Box 3. Private sector operation of an inspection and maintenance program in the Mexico City

Metropolitan Area 19Box 4. Phasing out leaded gasoline: Misconceptions and facts 20

Box 5. Fuel pricing policy in Asia and beyond: Getting the incentives right 25Box 6. Improving air quality in the Mexico City Metropolitan Area through a comprehensive pollution

reduction program 37

Figures

Figure 1. Composition of environmental damages from fuel combustion in six developing countrycities, 1993 11

Figure 2. Environmental cost of fuel use by sector in six developing country cities 12Figure 3. Levels of decisionmaking affecting transport-related urban air quality management 30

Tables

Table B-1. Diesel formulations certified by the California Air Resource Board 47

Foreword

Jn many large urban centers around the world, es- with such issues as trade and price liberalization, en-pecially in developing countries, deteriorating ergy policies, and global climate change. Initiativesurban air quality is a worsening environmental in the transport and energy sectors such as road con-

problem. Poor air quality threatens human health and struction, fuel pricing reforms, and elimination of sub-causes other forms of environmental damage. Vehi- sidies affect, for good or ill, air pollution and thereforecle emissions, including highly damaging emissions human health. It is essential to coordinate policies and

of lead and of fine particulate matter, are often among measures in these areas if projects and programs arethe main contributors to air pollution. to meet their long-term objectives and contribute to

This paper looks at the key issues involved in sustainable development and the improvement ofmitigating transport emissions that cut across sectors; human welfare.examines the priorities for air quality management We hope that this paper will stimulate discus-programs; and reviews experience, including that of sion on how to harmonize policies in different sectorsWorld Bank, with air quality management efforts. It and arrive at cost-effective measures for reducing airdraws lessons from this assessment and offers recom- pollution from the transport sector.mendations for priorities in developing coordinatedassistance strategies in the environment, urban trans-port, and energy sectors. Kristalina Georgieva

As the paper shows, one-dimensional efforts to Directorreduce air pollution-by, for example, introducing Environment Department

strict standards or banning certain activities - can beineffective on their own, may introduce perverse in- Rashad Kaldanycentives, or may disproportionately affect the poor. DirectorPrograms to improve air quality are also bound up Oil, Gas, and Chemicals Department

v

Abstract

T ransport-related air pollution is increasingly strategies should be the balancing of costs, benefits,contributing to environmental health risks in and technical and institutional feasibility.many developing country cities. The social Inherent linkages among transport, environment,

costs of poor urban air quality can be significant, and energy issues call for closely coordinated policies.making this issue an immediate priority. Long-term Vehicles and fuels should be treated together as a sys-measures for dealing with the problem include ur- tem; thus governments need to consider measures forban planning and traffic demand management. This improving both fuel quality and vehicle emissions per-paper, however, focuses primarily on cost-effective formance. Monitoring and enforcement are essential

measures that are feasible to implement and that can because the effectiveness of the investments made tobring about measurable results in the short to medi- improve fuels and vehicles is seriously compromised

if vehicles are not maintained and fuels are adulterat-um term.

ed. To determine the speed and the rigor with whichTher isa tndecy n sme uarersin he n -olicies should be implemented, countries need to

vironment sector to focus narrowly on controlling kow theunatue anptemanitud cofnthe pollutotailipe missonsby iportng te bst aailale now the nature and the magnitude of the pollution

taihnlppe e onst-effbyt n i rtaingathe bsolutavaiabl problem, which implies a need for reliable air qualitytechnology. Cost-effective and sustainable solutions, monitoring and an understanding of the contributionshowever, require a much broader appzroach. In de- moioigada,nesanigo h otiuin

however, require a much broader approach. Inde- of various sources. Furthermore, measures to imposeveloping countries, improving air quality is not sim- (and enforce) tighter air pollution standards have im-ply a matter of importing advanced technologies or plications for the downstream petroleum sector, foradopting Western standards. Choices concerning the the tax and tariff regime, and for traffic management.feasibility, sequence, and timing of pollution-reduc- In brief, the problems are multisectoral, involving theing measures have serious fiscal and economic con- energy, environment, and transport sectors at bothsequences. The guiding principle for selection of national and local levels.

vii

Acknowledgments

his paper was prepared by Masami Kojima, stalina Georgieva, Director, Environment Department,Senior Energy/Environment Specialist in the and Rashad Kaldany, Director, Oil, Gas and Chemi-World Bank's Oil, Gas and Chemicals Depart- cals Department, in close collaboration with Kenneth

ment, Policy Division, and Magda Lovei, Senior Gwilliam,Adviser,UrbanDevelopmentandTransportEnvironmental Economist in the World Bank's Envi- Department. The authors are grateful for the valuableronment Department, with contributions from Nor- comments and collaboration of Robert Bacon, Edwardeen Beg, Environmental Specialist in the Environment Dotson, Asif Faiz, Charles Feinstein, Eleodoro May-Department at the time of the preparation of the pa- orga-Alba, Gerhart Menckhoff, Jitendra Shah, andper, and Surhid Gautam, Operational Analyst in the many others, as well as to Nancy Levine for herEast Asia Environment and Social Development Unit. editorial assistance and Jim Cantrell for desktopThe work was carried out under the guidance of Kri- publishing.

ix

Abbreviations and Acronyms

ACEA Association des Constructeurs Europeens d'Automobiles (European AutomobileManufacturers Association)

BAT Best available technology

CARB California Air Resources Board

CDM Clean Development Mechanism

CETESB Companhia de Tecnologia de Saneamento Ambiental (Brazil)

CIDA Canadian International Development Agency

CNG Compressed natural gas

CO Carbon monoxide

CO 2 Carbon dioxide

EPEFE European Programme on Emissions, Fuels and Engine Technologies

ESMAP Energy Sector Management Assistance Programme

EU European Union

GDP Gross domestic product

GEF Global Environment Facility

GHG Greenhouse gas

GTZ German Agency for Technical Cooperation

ICR Implementation completion report

IEA International Energy Agency

I/M Inspection and maintenance

IQ Intelligence quotient

LAC Latin America and the Caribbean

LIL Learning and Innovation Loan

xi

xii Urban Air Quality Management

LPG Liquefied petroleum gas

MCMA Mexico City Metropolitan Area

MEIP Metropolitan Environment Improvement Program

MON Motor octane number

NGO Nongovernmental organization

NIS Newly independent states

NMT Nonmotorized transport

N,O Nitrous oxide

NO, Nitrogen dioxide

NO, Nitrogen oxides

OECD Organisation for Economic Co-operation and Development

PCF Prototype Carbon Fund

PM,1,, Particulate matter with an aerodynamic diameter of less than nn microns, as in PM,, and PM2 .5

RON Research octane number

SO2 Sulfur dioxide

SO3 Sulfur trioxide

Sox Sulfur oxides

SSATPP Sub-Saharan Africa Transport Policy Program

TSP Total suspended particles

UNDP United Nations Development Programme

UNECE United Nations Commission for Europe

URBAIR Urban Air Quality Management Strategy (in Asia)

US EPA U.S. Environmental Protection Agency

VKT Vehicle kilometers traveled

VOC Volatile organic compound

WBI World Bank Institute

WI-lO World Health Organization

wt ppm Parts per million by weight

g/km Grams per kilometer

km/h Kilometers per hour

ig/dl Micrograms per deciliter

ltg/m 3 Micrograms per cubic meter

AIm Micron, or 10-6 meter

Executive Summary

A ir pollution is one of the most serious envi- induce significant shifts in transport mode are impor-,A ronmental concerns in urban areas, especial- tant in influencing urban environmental trends, they

/ ly in view of its adverse effects on human are beyond the scope of this paper.health. In developing countries around the world, anestimated 0.5 million-1.0 million people die prema- Developing strategies for improving airturely each year as a result of exposure to urban air qualitypollution, and millions of cases of respiratory illness Anthropogenic air pollution originates from a varietyare associated with air pollution in large cities. Among of sources, including households; vehicles; large sta-the greatest environmental health concerns are expo- tionary sources; small and medium-size industries;sure to lead, which contributes to behavioral problems construction; fugitive emissions as a result of mechan-and learning disabilities of young children even at low ical breakup, abrasion, and erosion of road surfaces,levels of exposure, and exposure to fine particles, brake linings, and tires; agriculture; and forest burn-which are known to cause serious health damage due ing. Motor emissions can contribute as much as 80-90to their penetration deep into the lungs. The econom- percent of atmospheric lead in cities where leadedic damage from urban air pollution (including its ef- gasoline is still used, and traffic is also a large contrib-fects on structures, crops, and vegetation and forests) utor to fine particulate matter. Next to the elimina-is estimated to amount to US$1 billion-US$4 billion tion of lead from gasoline, which is an effectiveannually in cities in Asia and to US$6 billion in urban measure for reducing human exposure, the reduction

of fine particulate matter is by far the highest prioritv.area inthe ewl indpenent tats (NS).Air ol- Vehicle emissions, together with stationary and natu-

lution also contributes to the accumulation of strato-ral sources, are important in the formation of ground-

spheric greenhouse gases, with implicatons for global level ozone, which causes health damage as well asclimate change. damage to vegetation and crops. Mobile and station-

This paper discusses the growing air pollution ary combustion sources are significant contributors toproblem in developing countries and outlines ap- ambient concentrations of a range of other pollutants.proaches to urban air quality management in the trans- A priori assumptions about which sources shouldport sector. As countries become motorized, vehicles be targeted for pollution reduction can result in choiceswill contribute increasingly to urban air pollution. of measures that are not cost-effective or do not haveTackling air pollution arising from the use of vehicles a significant impact on air quality. A systematic ap-in turn calls for coordinating urban transport, envi- proach, therefore, is needed to formulate a strategyronment, and energy policies. Although the broader for improving urban air quality. Such an approachissues of long-term urban planning and measures to should:

1

2 Urban Air Qutality Management

* idenitifij the main environmental concerns on the ba- Potential win-win measures

sis of assessment of risks to human health and to A number of measures that are typically undertaken

environmental resources, and relative source con-tributions to pursue other primary objectives are likely to gen-

tributions erate environmental benefits as well.

Use cost-effectiveness as the primary criterion for se- * Improved trafficflow management- for example, co-lecting optimal strategies across various sources ordinating traffic lights-is aimed at decreasing

and~~~~~~~~~~~~~OdNtll sectorshS1Same t eresnand sectors congestion and improving mobilitv but also con-

* Harmonize policies and measures across sectors and fers environmental benefits because of the result-

help implement the selected strategies. ing lower emissions intensity of traffic. It should

Industrial countries have made significant be noted, however, that some congestion-reliev-ing efforts, such as road construction, can invite

ci-omb ina o enpvirnmental an sectoray regla g greater levels of motorization in the long run.combination of environmental and sectoral regula- Tafcdmn aaec freape hogtions, incentives and fiscal measures, and advanced traffi demand management-ort examp tho ug

the provision of public transport, promotion oftechnologies. In many developing countries, choices nonmotorized transport, application of fuel taxes

about the feasibility, sequencing, and timing of simi- and other fiscal measures, areawide licensing, elec-

lar measures have serious fiscal and economic conse- tronic road pricing in urban areas, and preferen-

quences. The guiding principles for selection of tial treatment of high-occupancy vehicles-is

strategies and regulations should be the balancing of aimed at inducing a behavioral change in the use

costs and benefits and the institutional feasibility of of vehicles and has beneficial environmental im-

the measures. The transfer of advanced technologies pacts.

without consideration of their applicability, or the use * Some vehicle use and main tenance practices - such as

of strictly sectoral approaches to improving air quali- using the correct type and amount of lubricant in

ty, may fail to produce the desired effects if not based two-stroke engine vehicles, avoiding overfueling

on a comprehensive strategy. For example, advanced diesel engines, and correcting injection timing-

fuel and vehicle technologies used in industrial coun- have positive economic and environmental im-

tries are expensive and are designed to make already pacts.

clean vehicles cleaner. Importing these standards in asituation with large numbers of highly polluting ve- Targeted pollution abatemenit miieasures

hicles and an inadequate repair infrastructure would In addition to encouraging the above win-win inea-

require a large allocation of resources and is unlikely sures, several options for targeting pollution from

to be cost-effective. The development community has vehicles are widely used, but their effective applica-

to consider these issues in helping developing coun- tion depends on a number of conditions:

tries address their environmental issues effectively. * Tiglhtened vehicle emissions stanidards. The conditionsfor effectively controlling emissions through stan-

Vehicle emissions abatement measures and dards are reliable vehicle registration, emissions

their cost-effectiveness standards that differentiate vehicles by type andage, means of measuring emissions levels accu-

Vehicle emissions, which occur near ground level and rately, and methods for enforcing the emissionsin densely populated areas, cause much greater hu- standards. Where existing emissions and vehicle

man exposure to harmful pollutants in the immedi- standards are inadequately enforced, it may be

ate locality than do emissions from sources such as more productive to concentrate on enforcement

power plants that are situated at elevated levels and than to tighten the standards.

farther away from dense population centers. In addi- * Improved vehicle technology. Three-way catalytic

tion, vehicle exhaust particles, being small and nu- converters, if properly operated and maintained,

merous, can be expected to have considerable health can significantly reduce emissions of exhaust car-

impacts. Pollution abatement in the transport sector bon monoxide (CO), hydrocarbons, and nitrogen

is therefore likely to become increasingly important oxides (NO) from gasoline vehicles. Modern die-

in urban air quality management strategies in the com- sel engines are much cleaner than those produced

ing years. in the past, but they require proper fuel quality.

Executive Summary 3

* Inspection and maintenance (I/M) programs. I/M pro- The existing diesel and natural gas pricing struc-

grams can mitigate transport pollution by strength- ture in most countries provides little incentive forening the enforcement of emissions standards and switching from diesel to CNG. The major disad-can stimulate demand for vehicle repair and main- vantages of electric vehicles, in comparison withtenance services, if such programs are properly other alternative-fuel vehicles, are the length ofoperated and are corruption-free. time needed for recharging them, their short

* Vehicle retirement and scrappage programs. These ranges, and their considerably higher purchaseprograms must be used with care. Income con- costs. The long-term viability of electric vehiclesstraints make cash-for-replacement particularly should be evaluated from the standpoint of mar-difficult to design in developing countries; own- ket-based energy pricing. While pure electric ve-ers of gross emitters with high annual vehicle ki- hicles may not be expected to have widespreadlometers traveled are often not in a position to application, hybrid electric-internal combustionpurchase much newer vehicles. engines may play a greater role in the future.

* Improved fuel quality. Improvements in fuel qual-ity can contribute to better air quality if they are Cross-sectoral coordination of policiesclosely coordinated with improvements in vehicle Policies in various sectors have close linkages andtechnology. For the World Bank's client countries, should be coordinated and harmonized to achievethe first step in improving the quality of transport optimal results. Coordination is especially importantfuels is to phase out lead in gasoline. A number of for policies that target vehicle technology and fueldeveloping countries have already banned leaded qualitygasoline, and several others are planning to do soin the near future. At the same time, it is impor-tant to address other fuel parameters that may have V t f q aadverse health impacts. For countries that have A number of fuel-related issues need to be considereddomestic refineries, it has to be kept in mind that in formulating transport, environment, and energyrefinery processes are integrated so that changes policies:in the specifications of different fuels should be * Emissions levels of lead depend solely on fuel com-coordinated to optimize refinery modernization position, and lead is extremely toxic. Its phaseoutschemes. Although there are benefits from the re- from gasoline is technically feasible and is an ef-gional harmonization of fuel specifications, these fective measure for reducing pollution and healthspecifications have to reflect national and local impacts.conditions. * In many developing countries the vehicle fleet is

* Use ofalternativefuels. Alternative fuels have strong dominated by poorly maintained, often old, ve-

advantages and disadvantages. Vehicles using liq- hicles. As long as large numbers of these vehiclesuefied petroleum gas (LPG) and compressed natu- are on the road, the cost-effectiveness of tighten-ral gas (CNG) emit considerably less particulate ing fuel specifications to North American or Euro-matter than do conventional diesel, and vehicles pean Union (EU) standards is questionable.

powered by electricity have no tailpipe emissions. * In countries where the carbonaceous component

The required investments in LPG distribution and of vehicular particulate matter is still high, it mayrefueling stations have not been made in most de- not make economic sense to target sulfur in dieselveloping countries, constraining the widespread to match North American and EU fuel standardsuse of this fuel. CNG yields essentially no reactive if the goal is to mitigate particulate emissions fromorganic compounds or sulfur oxide (SOx) emis- diesel engines.sions, but it is much more expensive to distribute * It is not enough to regulate fuel quality. In a num-

and store than LPG. The basic requirements for the ber of countries transport fuels are routinely adul-

long-term viability of CNG vehicles are a natural terated by adding (lower-cost) kerosene or lead to

gas distribution network that is already in place, gasoline downstream of refineries or terminals.

retail fuel prices that favor CNG substantially over Regular fuel quality monitoring, together with

the fuels that CNG is intended to replace, and a costly penalties for noncompliance, could helpfavorable legislative and regulatory atmosphere. enforce fuel standards more effectively.

4 Urban Air Quality Managemnenit

The promotion of modern vehicle technology has however, because of the expected impact of such tax-to be harmonized with measures for fuel quality ation on other uses of diesel - in the heavy-duty vehi-improvement. Modem engines often require a cer- cle category, rail transport, agriculture, and industry,tain fuel quality that may not be readily available for example. An alternative is to increase vehicle tax-in developing countries. es on diesel vehicles typically used in intracity trans-

* A number of conditions need to be satisfied for port (that is, light-duty diesel vehicles) or to givecatalytic converters to function effectively, includ- rebates on the diesel tax to industrial and agriculturaling wide availability of unleaded gasoline, a rea- users of diesel.sonably low level of sulfur in vehicle fuels, and an Tax structures that discourage the purchase ofeffective inspection and maintenance system, in- new vehicles - for example, registration fees or excisecluding the existence of appropriate standards. The taxes based on the market value of the vehicle- shouldpromotion of catalvtic converters provides a strik- be carefully reviewed and, if possible, revised, since

ing example of the interdependence of transport they do not capture the cost of pollution. In consider-energy, and environmental policies.

ing fiscal measures, the socioeconomic impact of mak-

Targeting gross emiitters ing the ownership of old vehicles more costly shouldbe considered.

The share of emissions is not uniformly distributedover the vehicle fleet. A fraction of ill-maintained, of- Trade liberalizationten old, vehicles is typically responsible for a dispro- The removal of barriers that hinder access to the tech-portionate amount of pollution from the transport nology available in the rest of the world would en-sector. If these "high emitters" can be repaired or per- able consumers to meet tighter emissions standardsmanently eliminated, a considerable reduction in pol- at least cost. Rules such as local content requirementslution can be achieved at a relativelv small cost.

often result in inefficiency. Higher import tariffs onPolicies targeting certain types of vehicles should take oen resu in i icency.gHighe r imports on

intoconideatin thir istibuiona imact onthe new vehicles, rigid licensing schemes for imports, andpnto or. ideration their distributional impacts on the quotas are all likely to slow the rate of vehicle renew-poor. al, with potentially adverse impacts on air pollution.

Fiscal policies Free trade in used cars can have mixed results.Exports of gross emitters would be a classic case of

Fiscal policies include higher taxes on more polluting environmental dumping. In the interest of environ-fuels and vehicles. A good example is a policy of pric- mental protection, governments may limit the age ofing unleaded gasoline lower than leaded gasoline the vehicles that can be imported, levy higher import

during the transition period when lead in gasoline is duties, or impose other restrictions on such vehicles.being phased out. The purchasing pattern of vehicle owners should be

Prevailing fuel subsidies and taxation can have carefully balanced against the expected environmen-

adverse environmental impacts. For example, gaso- tal advantages of restricting the import of old vehi-line is taxed to a considerable extent in many devel- cles. If, for example, consumers cannot buy relatively

oping countries, but diesel and kerosene are either less new vehicles, an import restriction based on agetaxed or subsidized. A large price differential between would postpone the replacement of the high emitters.kerosene and gasoline leads to illegal addition of ker- Several industrial countries levy a fee to cover the fi-osene to gasoline, resulting in higher pollutant emis- nal disposal of vehicles, and countries that import usedsions. Similarly, a large price differential between vehicles could negotiate the transfer of such funds togasoline and diesel encourages a shift from gasoline- cover disposal costs.powered to diesel vehicles in the light-duty catego- Liberalized trade, by enabling the use of superi-

ry - a shift that is unfavorable from the environmental or fuels produced in other countries, makes it muchpoint of view because of the emerging epidemiologi- easier to phase out gasoline lead and to implementcal evidence that diesel emissions are more toxic than other fuel quality improvement measures. In somegasoline emissions. A policy of narrowing the price regions there is a move toward harmonizing fuel spec-gap by taxation is not necessarily the best approach, ifications to ensure minimal environmental standards,

Executtive Summtiary 5

foster intraregional trade, and enhance the efficiency can be perceived as a denial of these countries' basicof supply. Fuel specifications in North America, the right to economic growth and improvement of humanEU, and the countries of the former Soviet Union are well-being. Some measures that reduce local pollu-already harmonized for the most part, and similar tion, however, also reduce GHG emissions.measures have been proposed in Latin America. One area of overlap between local and global

Many refineries in developing countries are benefits is increasedfiel economy. The enormous gainsowned by the government, and some of them are not made in improving fuel economy in the 1970s and theoperated economically. In a number of developing first half of the 1980s have contributed to decreasingcountries, the net cost to society of improving fuel both local and global pollution in industrial countries.quality by importing superior fuels would be lower In developing countries fuel economy is often lowthan the cost of supplying domestically manufactured because of such factors as poor vehicle maintenance,fuels with less-stringent fuel specifications. Down- fuel adulteration, and low engine compression ratio,stream petroleum sector reform through transfer of although the small engine sizes typically found helpownership from the government to the private sector, to offset the low fuel economy.coupled with liberalization of petroleum product trade Another area of overlap between local and glo-and the introduction of competition, is therefore an bal pollution-reduction goals is traffic management.

important condition for improving fuel quality and, Traffic congestion worsens emissions of both local andultimately, urban air quality. global pollutants. It has been reported that increasing

the average speed in city traffic from 10 kilometersGreenhouse gas emissions per hour (km/h) to 20 km/h can cut CO2 emissions

Most environmental externalities from transport- by nearly 40 percent.such as those affecting human health - impose imme- It is important to recognize, however, that therediate social costs and require national and local action. is not always a synergy between measures to reduceBy contrast, emissions of greenhouse gases (GHGs), local pollution and measures to mitigate GHG emis-including carbon dioxide (CO2 ), methane, and nitrous sions. Locally motivated air quality improvement pro-oxide (N2 0), contribute to a global externality, the grams for urban transport in such middle-incomeimpacts of which will accrue in the more distant fu- countries as Mexico and Chile have been shown toture. Solutions to this problem require concerted in- have limited collateral benefits for reduction of GHGternational efforts. emissions.

The worldwide move to mitigate local pollution

Global trends in C02 emissions by progressively reformulating transport fuels

For most countries, the share of emissions arising from through severe hydrotreating is making refinery pro-' ~~~~~~~~~cesses increasingly energy-intensive, thus increasing

transport has increased in recent decades. Although cessicesnl nryitnie hsicesntransporthasinre asfGHGedsions fre decades.pi Alough GHG emissions. Diesel fuel is particularly efficient andthe share of GHG emissions from developing coun-tries is small compared with that of member coun- helps reduce GHG emissions, but its emissions maytries of the OECD (Organisation for Economic be more detrimental to human health than those of

Co-operation and Development), especially in the other fuels.transport sector, there are concerns about future An area that merits examination is the role of fueltrends. If OECD countries begin to restrain their emis- pricing in encouraging better fuel economy and opti-sions while developing countries - whose economies mizing fuel usage. In some countries diesel is hardlyare growing more rapidly than those of the OECD - taxed, making its retail price low. Such a pricing pol-do not, total emissions from the developing countries icy encourages excessive use of diesel.are forecast to overtake those from the OECD withina fairly short time period. Decisionmaking levels in transport-related

air quality management

Options for reducing GHG emnissions Decisions made at different levels affect policies de-

Politically, suggestions for GHG mitigation measures signed to combat transport emissions. At the globalin developing countries are often received warily and level, moves are being made to address issues such as

6 Urban Air Quality Management

GHG emissions that can be tackled only globally, and tice are only starting to emerge. Coordination, withinvehicle manufacturers are leading initiatives to har- the Bank and in client countries, among the transport,monize fuel quality and vehicle emissions standards environment, and energy sectors is an essential con-worldwide. At the regional level, pollutants such as dition for air quality management but has only nowsulfur dioxide (SO2 ) require solutions that transcend begun to develop.country boundaries. There are also initiatives to har-monize fuel specifications and vehicle emissions stan- Analytical work

dards on a regional basis, notably in the EU. In the In connection with its assistance to the governments

NIS these standards are already harmonized by vir- of Indonesia and Chile, the World Bank developed a

tue of the countries' history. In some regions standards methodology for estimating the health impacts of keyare increasingly integrated on account of extensive air pollutants. Analytical resources were geared to-

trade. All these trends affect decisionmaking at the ward obtaining estimates of the benefits of pollutionnational level. reduction by employing models of health effects, pol-

The national government typically sets air qual- lutant exposure, and dispersion.

ity standards, fuel specifications (with geographic dif- In Mexico City an analysis of pollution abatementferentiation if the distribution infrastructure can measures in the transport sector evaluated and ranked

support it), vehicle emissions standards, and defini- in terms of cost-effectiveness 26 technical measurestions of what constitutes noncompliance. Air pollu- for making vehicles and fuels less polluting. Analy-tion problems, however, are location-specific, and it ses in Santiago and Mexico City showed that the mea-is state and municipal governments that monitor air sures studied could reduce local pollution by aboutand fuel quality and vehicle emissions; integrate trans- two-thirds but that the effect on greenhouse gases wasport considerations into overall city development only 5 to 6 percent.plans; develop traffic flow, demand management, and Another study estimated the social costs, includ-

other strategies for dealing with traffic congestion and ing health and nonhealth damages and climate change

emissions; and, where appropriate and fiscally possi- impacts, associated with the different types of fuelsble, offer financial and other incentives for vehicle re- and a variety of sources in six developing country cit-newal, nonmotorized transport, and other means of ies. The findings indicate large health effects frommitigating traffic emissions. vehicles and small stationary sources, whereas large

These considerations are important in determin- sources contribute the most to climate change impacts.ing the proper instruments and frameworks for as- The implication is that the overlap between measuressisting client countries in their efforts to improve their for addressing local and global issues is likely to beenvironments and strengthen their environmental limited. Diesel-powered urban vehicles and smallpolicy and regulatory frameworks. The World Bank, stoves and boilers that burn coal, wood, or heavy oilthrough its policy dialogue with client governments impose the highest social costs per ton of fuel. Theat the national level and through sectoral programs large range of environmental damages for differentand projects at the urban level, can be effective in forg- combinations of fuels, sources, and locations limits theing cross-sectoral coordination of policies and support- efficacy of simple fuel-pricing measures. A skillful mixing measures that can contribute to improved of policy instruments able to send highly differentiat-environmental conditions in developing countries. ed signals to various users of fuels is required.

World Bank experience with support for air Nonlending services

quality management programs Among the Bank's major nonlending activities are the

In recent years the World Bank has started to address Urban Air Quality Management Strategy (URBAIR)urban air quality management and its interlinkages in Asia, lead phaseout, clean transport fuel studies andwith the transport sector, primarily through analyti- programs, the South Asia two-stroke engine initiative,cal work, nonlending services, regional initiatives, and and regional clean air initiatives.partnerships. A coherent and consistent strategy, how- URBAIR. The objective of the URBAIR programever, does not yet exist, and examples of good prac- was to assist in the design and implementation of pol-

Executive Summary 7

icies, monitoring, and management aimed at restor- ment is a cost-effective mitigation measure. For exist-ing air quality in Asian metropolitan areas. It coming vehicles, use of the proper quality and quantity ofbined air quality analysis with economic evaluation lubricant is a win-win action that can reduce emis-(calculations of health damages and of the costs of sions at no extra cost to the owner and that makes formitigation measures) in four participating cities: Jakar- better engine maintenance.ta, Mumbai, Kathmandu, and Metro Manila. The find- Regional clean air initiatives. The World Bank In-ings and results of URBAIR are being followed up in stitute (WBI) has undertaken Clean Air Initiatives thatthe World Bank's Mumbai Urban Transport Project focus on major Latin American and Sub-Saharan Af-

and in other programs. rican cities and has started similar programs in EastLead plhaseout. The Bank has called for the com- and South Asia and in Europe and Central Asia. The

plete phaseout of lead in gasoline in developing coun- goals of the initiatives are to promote the integratedtries and has undertaken a number of activities to that development or enhancement of clean air city action

end. It has supported health and feasibility studies, plans, with participation by all relevant stakeholders;

prepared policy papers, made public statements, and to advance exchange of information; and to fosterworked with bilateral and multilateral partners and public participation and the active involvement of the

nongovernmental organizations (NGOs) to raise private sector in implementing recommendations as

awareness and build political commitment. The Bank appropriate. The approach includes workshops, dis-has also assisted individual countries with studies and tance learning training, network support, and infor-

implementation and has worked to build consensus mation and outreach activities.and dispel myths about lead phaseout. Elimination

of gasoline lead raises complex technical and fuel qual- The urban transport portfolioity issues that have to be addressed as part of a com-prehensive, cost-effective approach to air quality In some Bank urban transport projects, there is a fairmanagement. Accordingly, lead phaseout initiatives amount of overlap between transport and environ-have led to broader programs and studies that address mental objectives. Examples include replacing oldcost-effective ways of improving transport fuel quali- buses, constructing light rail systems, and improvingty in specific countries or in entire regions. traffic management to reduce congestion and increase

Clean transport fuels. Vehicle fleet characteristics, road safety. Relatively few projects or components,fuel consumption patterns, and the downstream pe- however, have explicit air quality improvement ob-

troleum sector often have many similarities in a giv- jectives.en region. By setting minimal fuel and vehicle Some projects have financed studies to prepareemissions standards, which individual countries can action plans for addressing vehicular air pollution inchoose to exceed to meet their own air quality objec- urban areas. The China Liaoning Urban Transporttives, a regional approach not only ensures that min- Project supports improvements in the environmentalimal environmental standards will be maintained but sustainability of project investments by developingalso significantly reduces illegal smuggling of lower- and implementing a motor vehicle emissions controlpriced, poor-quality fuels. By facilitating intraregion- strategy. Many urban transport projects seek to pro-al trade, a regional approach also offers the potential mote nonmotorized transport (NMT) -for example,for reducing the incremental cost of improving fuel by constructing overpasses and bicycle paths and cre-quality and vehicle technology. The World Bank has ating pedestrian and restricted traffic zones. An NMTsupported regional initiatives in Latin America and program within the Second Shanghai Metro Transportthe Caribbean and in Central Asia and the Caucasus. Project includes establishment of an exclusive 19.4-

Two-stroke-enginte initiative. In South Asia a World kilometer network of nonmotorized vehicle routes inBank study examined the options for reducing emis- and around the central business district.sions from the two-stroke engines commonly used in Active projects in Brazil and Bangladesh allocatetwo- and three-wheeler vehicles in the region. The funds for I/M components, and projects in Argentinafindings from this initiative are being applied in sev- and Bangladesh include air quality monitoring com-eral projects. Encouraging replacement of two-stroke ponents. Two projects in Brazil (in Belo Horizonte andwith four-stroke engines at the time of vehicle retire- Recife) emphasize the need for appropriate pricing


and parking policies to deter automobile growth in * Several urban transport projects have adoptedcity centers. In the Budapest Urban Transport Project, "win-win" measures that reduce both congestiona proposal was made for the introduction of entry/ and air pollution, particularly through transportuse charges for motor vehicles in the inner city, with a management. In general, however, interventionsdual objective of traffic restraint and generation of designed to improve urban air by reducing trans-funds; the political aspects of such a decision are, how- port emissions do not feature strongly in the Bank'sever, sensitive. urban transport portfolio. The overall amount al-

Some projects have attempted to curb demand located specifically to air quality improvementfor polluting vehicles by, for example, banning out- objectives is typically around 1 percent of totalright certain vehicles, such as three-wheelers with two-stroke engines. Measures for traffic restriction have project cost.also been proposed. Environmental measures in urban transport

projiects often include the introduction of air qual-Excep forthe Cina uanghou Cty Cnter ity monitoring and vehicle inspection and main-

Transport Project, urban transport projects tvpicallyI ~~~tenance . Experience suggests that the sustainability

have not attempted to address fuel quality issues such tanc Ept erienc suggestsihatith sustainabias the phaseout of lead from gasoline. One reason is and optimal design of such monitoring systems arethat such issues are generally under the control of the a major concern. In the face of widespread corrup-energy sector at the national level, which adds to the tion, lack of adequate repair and service facilities,complexity of the projects. and poor cultural acceptance of regular vehicle

maintenance, enforcement of existing vehicle emis-

Other relevant portfolios sions standards remains a serious challenge.Financil s t f * The responsibility for manv environmental regu-

Financiat support for paving and rehabilitating ltosrsswtIhetaIgvrmn,lmtnroads -which reduces dust and the associated health lations rests with the central government limitingeffects-has typically been included in urban devel- what can be achieved in the framework of urbanopment projects rather than urban transport projects. projects. Most urban transport projects focus onActivities that improve traffic flow (repair of streets local interventions such as improving traffic man-and sidewalks, installation of street signs and traffic agement, segregating nonmotorized transportlights, and creation of bus routes) confer health bene- routes, and strengthening local monitoring sys-fits. Some transport projects include components for tems.NMT, air quality, elimination of gasoline lead, and * Measures with explicit environmental objectivespollution reduction. are not always assessed in terms of their cost-ef-

fectiveness, the presence of necessary conditions(such as fuels that match certain vehicle technolo-

Urban air quality management is a relatively new area gies), and linkages with policies in other sectorsof focus for the Bank. This paper summarizes some of such as energy.the key technical and policy issues of relevance to theBank's activities in the transport-environment-ener- The transport sector is primarily concerned withgv interface, describes nonlending activities, and re- improving people's lives and contributing to economicviews the urban transport portfolio with an emphasis efficiency through better mobility, better access to

on air pollution management activities in projects. The transport services, and increased efficiency in goodsfollowing conclusions can be drawn from this assess- The implications of trans-

ment: ~~~~~~~~~~~transport. Teenvironmental ipiain ftas*enth Bank has supported analytical work and port policies, as well as their social and equitv impli-

*The Bank has supported analytical work andnonlending activities that emphasize integrated cations, should therefore be an integral part ofapproaches to urban air quality management. sustainable transport strategies. On the basis of theLinking these activities with lending specifically above observations, the following recommendationstargeted to improving air quality, however, re- can be made for the Bank's urban transport and envi-mains a challenge. ronment strategies.

Executive Summary 9

Properly implement environmental safeguard policies. sound and internally consistent. Areas for coordi-In most cases, proper implementation of environ- nation include setting fuel and vehicle emissionsmental safeguard policies -based on environmen- standards and improving fuel quality monitoringtal assessments of projects and the execution of and vehicle emissions inspection feasible for de-environmental management plans, where appro- veloping countries. Even the most modern enginespriate -are sufficient to ensure that urban trans- will pollute a great deal if the gasoline with whichport projects do not cause undue harm to people's they are fueled is adulterated with kerosene. WVhichhealth and the environment. fuel parameters to monitor, how often, by whom,

* Integrate environmental externalities into economic and when are issues that the Bank is only now be-analysis of transport strategies. The environment ginning to address.community has improved the analytical tools and * Develop strategic long-term programs. Urban air qual-methodologies for the economic assessment of itv management involves interactions with a largeenvironmental externalities, and such methodolo- number of agencies and stakeholders. In addition,gies should be more widely used. a number of donors are increasingly active in this

* Focus on win-win measures. Transport sector inter- area in many of the cities in which the Bank oper-ventions should build on the synergies between ates. Coordination with various players requiresreducing negative environmental impacts and re- significant resources. The Bank could lead suchducing other negative externalities in the transport efforts in selected cases when governments aresector. Areas of such synergies include improve- committed, clear targets can be set, and properments in traffic and demand management, monitoring of efforts can be undertaken. Program-nonmotorized and public transport infrastructure, matic lending instruments could be utilized forand fuel efficiency. such efforts.Improve the environmental ouitcome of projects. Al-though most of the Bank's transport interventions In addition to these generic recommendations,are not primarily environmentally oriented, it may some specific issues need to be considered:be useful to think opportunistically about what can * Reassessment of air quality monitorinig activities. At-be achieved through marginal adjustments to the tempts to introduce complex air quality monitor-projects for the benefit of the environment. The ing systems have often failed in our clientanalogy is the concept of "global overlays," in countries. In some cases it is recommended thatwhich local and global pollution are considered only one or two pollutants be monitored, using thetogether. How and where such a concept can be technology that the country has the technical ca-effectively utilized is an area that should be inves- pacity to operate and maintain. Air quality moni-tigated. toring activities undertaken in urban transport

* Develop a proactive approach toward improving air projects should, in any case, be coordinated withq.uality. Although win-win measures have positive the environmental authorities and with existingenvironmental benefits, improving the develop- monitoring networks.ment effectiveness of Bank assistance would re- Identification of heavily polluting vehticles and designquire a proactive approach, especially in areas ofcost-effective interventions that target tlem. In mostwhere deteriorating urban air quality causes great client countries, targeting gross polluters is likelysocial damage and constrains future growth. Such to be an effective pollution reduction measure.an approach could include the identification of cit- Such interventions should consider a range of op-ies in which air quality is a serious problem; agree- tions, including incentives for regular repair andments with national and city governments to work maintenance.on solutions to the problem; strategic environmen- * The institutionalfeasibility of pollution abatement mea-tal assessments to identify key sources of pollu- sures. While several pollution abatement measurestion and cost-effective sectoral interventions; and may have promising potentials, the institutionala long-term framework for Bank assistance. aspects of implementing such measures in client

* Coordinate among sectors. The Bank should ensure countries have to be considered.that the policies it recommends in the transport, * The social implications ofpolluition abatement measures.energy, and environment areas are technically Urban pollution disproportionately affects the


poor, and improvements in living conditions there- direct and indirect impacts on the poor that havefore generally benefit them. Specific choices and to be assessed.strategies for pollution abatement, however, have

Chapter 1

Environmental Concernsand Priorities in Urban

Air Quality Management

A ir pollution is one of the most serious envi- in urban children. The economic damage from air1A, ronmental concerns in urban areas, espe- pollution is estimated to amount to US$1 billion-US$4

cially in view of its adverse effects on billion annually in cities in Asia and to US$6 billion inhuman health. Other environmental impacts include the newly independent states (NIS). It represents updamages to buildings and structures, agricultural to 10 percent of urban income in polluted cities suchcrops, and vegetation and forests; reduced visibility; as Bangkok, Kuala Lumpur, and Jakarta (World Bankand increasing greenhouse gas emissions (Figure 1). 1997a; Hughes and Lovei 1999).

In developing countries around the world, an Comparative risk assessment and health studiesestimated 0.5 million-1.0 million people die prema- in a number of cities, including Bangkok, Cairo, Mex-turely each year as a result of exposure to urban air ico City, Quito, and Santiago de Chile, have indicatedpollution. Thousands of premature deaths and mil- that the greatest damage to human health comes fromlions of cases of respiratory illness are associated with exposure to fine particulate matter (particles smallerair pollution in large cities. Exposure to lead contrib- than 2.5 microns in aerodynamic diameter, or PM 2 5)utes to behavioral problems and learning disabilities and to lead.1 Next to elimination of lead from gaso-

Figure 1. Composition of environmental line, reduction of fine particulate matter is by far thedamages from fuel combustion in six highest priority. Other pollutants that have impactsdeveloping country cities, 1993 on human health include carbon monoxide (CO), ni-

I 1% trogen oxides (NO.), sulfur oxides (SO), ozone, and

21% 8%airborne toxics. NO and SO also contribute as muchas 30 percent to the formation of secondary fine par-ticulate matter.

As the income level rises, so too do the owner-ship and use of motorized vehicles. Depending on

Health impacts topographical and meteorological conditions, ozone

Climate change impacts can then become a serious problem in large metropol-itan regions with increasing gasoline consumption, as

Li Other it has, for example, in Mexico City and Santiago.

Note: The six cities are Bangkok (Thailand), Krakow (Poland), Ozone, a secondary pollutant, is formed by reactionsManila (Philippines), Mumbai (India), Santiago (Chile), and Shanghai of photochemically reactive organic compounds (com-(China). Calculations contain large uncertainties.Source: Lvovsky and others (2000). monly referred to as volatile organic compounds, or

11


VOCs) with NO ,2 A detailed discussion of the health areas. Mobile and small stationary sources thus con-impacts of various pollutants is given in Annex A. tribute more to human exposure than their share in

This paper discusses the growing air pollution total emissions loads would indicate (Figure 2).problem in developing countries and outlines ap- In terms of tonnage of emissions, CO typicallyproaches to urban air quality management in the leads all other pollutants. Acommon mistake is to add

transport sector. As countries become motorized, ve- up amounts of all pollutants and, on finding that COhicles will contribute increasingly to urban air emissions from vehicles make up a sizable fraction ofpollution. Tackling air pollution arising from the use the total, come to such conclusions as "transport is

of vehicles in turn calls for coordinating urban trans- responsible for 75 percent of air pollution." This ap-port, environment, and energy policies. Although the proach does not take into account the toxicity, health

broader issues of long-term urban planning and mea- impact, or dispersion of the pollutants and may leadsures to induce significant shifts in transport mode to incorrect inferences about priorities.are important in influencing urban environmental Nonexhaust particles can contribute significant-trends, they are beyond the scope of this paper. lV to overall particulate emissions from the transport

sector. Most of the data collected so far are from high-

The main sources of air pollution ly industrialized countries (where roads are paved).It is difficult to quantifv the impact of nonexhaust

Anthropogenic air pollution originates from a variety particles on overall ambient concentrations in devel-

of sources, including households, vehicles, large sta- oping countries because of scarcity of data. This istionary sources, small and medium-size industries, clearly an area to which the World Bank should pay

agriculture, and forest burning. Pollution from many greater attention. Another area for which only veryof these sources is closely related to the production limited data are available in developing countries isand consumption of energy, especially the combus- the contribution of NO and SO° to secondary partic-

tion of fossil fuels. Along with power stations and ulate formation and dry acid deposition.industries, domestic use of fossil fuels-notably, heat-

ing oil, biomass, and brown coal-is a significant Developing a strategy for mitigating airsource of ambient particulate matter and sulfur diox- pollution

ide (SO2), especially in cold-climate regions such as All too often, policymakers assume a priori that cer-parts of China and Eastern Europe. tain sources should be targeted for pollution reduction,

Traffic is a large contributor to fine particulate .

even when it is not clear that devoting limited resourc-emissions and often gives rise to as much as 80-90 es to mitigating emissions from those sources ispercent of atmospheric lead in cities where leaded necessarily cost-effective or will have a significant

gasoline is still used. Lead in gasoline also contrib- impact on air quality. A systematic procedure needsutes to fine particulate emissions. to be followed in formulating a strategy for improv-

Both natural and anthropogenic sources are im- ing urban air quality. (Box 1).portant in the formation of ground-level ozone.Natural sources (such as biogenic emissions from Figure 2. Environmental cost of fuel use byplants and trees) and traffic emissions are important sector in six developing country citiessources of atmospheric VOCs. Natural, mobile, and 1,600 -

stationarv combustion sources are significant contrib- ' 1,200 Global damage

utors to ambient concentrations of NO . Motor 8 Localdamage x sE ~~~800-

vehicles are typically responsible for the greatest part Aof CO emissions. 4

The impact of emissions on human exposuredepends on the location and dispersion of pollution. 2 e

0~~~~~~

Large stationary sources, often located at a distance X x ,from densely populated city centers, disperse into the o

higher layers of the atmosphere, while households and Note: Data from 1993. The six cities are listed in Figure I.

vehicles emit near ground level in highly populated Source: Lvovsky and others (2000).

Environmental Conicerns and Priorities in Urban Air Quality Managemenlt 13

Sectoral approaches to improving air quality, and Box 1. Key steps in developing a pollutiondonor assistance based on such approaches, may fail abatement strategyto produce the desired effects if they are not based on

a compehensve strtegy.An exaple i the So Pao 1. Identify the main envlironmental concerns on thea comprehensive strategy. An example iS the Sao Pao- bai ofassmndfrsk ohmnhatbasis of assessment of risks to human health

lo Industrial Pollution Control Project, supported by and environmental resources, and relativethe World Bank, which was designed to improve air source contributions.

quality by reducing particulate emissions from indus- 2. Use cost-effectiveness as the primary criterion fortrial sources. Although industrial particulate emissions selecting optimal strategies across variousfell substantially, the city's ambient concentrations of sources and sectors.particulate matter did not decrease markedly because 3. Build mechanisms for cross-sectoral coordinationthe main contributor to ambient concentrations was, to implement the selected strategies.

in fact, vehicle emissions, not industrial sources (World

Bank 1989). tances than those from low sources such as ve-ldeally, the analysis stage in constructing a strat- hicles. Consequently, the damage costs of emis-

egy for mitigating air pollution should involve the ssions from vehicles greatly exceed those from tall

following tasks: stacks for the same volume of pollutants. The re-1. Collect air quality data. Air quality should be moni-

sults of the dispersion model should be calibratedtored systematically, preferably for at least a year

'~~~~~~~~~ aainst measured ambient concentrations. In ad-to capture seasonal fluctuations. The data will dition, chemical and other analyses are powerfulshow which pollutants are exceeding national and itools for identifing the types, characteristics, andinternational air quality standards and guidelines. tools or identinthc

2. Develop an emissions inventory. In identifying sources of pollutants.sources Delof emissions,it isimportaInt tocoside rg 4. ldentilf measniresfor improving air quality and assesssources of emissions, it is important to consider their costs across sectors. It is not enough to identifyall major sources -mobile and stationary, indoor the main contributors to poor air quality;and outdoor. In particular (although the task is policymakers should also assess the costs of thedifficult), an attempt should be made to obtain the pieasuyes available for making improvements

best estimate of emissions from noncommercial across different sources and sectors. Because of thesources such as refuse burning, which can contrib-

ute significantly to air pollution in developing dsions and in the impact of those measures on am-countries. Also difficult to estimate is dust sonadnhiptfhse aueoam

bient air quality, a strategy that requires uniformresuspension from road traffic, construction sites, reductions without regard for their cost effective-and other areas disturbed by human activities.Obtaining a reasonable estimate of pollution from ness is veuopind co stly.this source presents a problem even in industrial Most opt the data an r

sources to carry out the above tasks. Meanwhile, aircountries. pollution in large cities continues to worsen, and pol-

3. Carry out dispersion modeling and source apportion-ment analysis. What is of primary concern is hu- y

measures without having the necessary informationman exposure to air pollution. The human health

about them. Under these circumstances, there is oftenimpact dominates the economic cost of urban air

a temptation to import cutting-edge Western stan-pollution. The number of people exposed, their dards and technologies without assessing their costs,

whichlthey stat, hexposedtandtccenrationlofeveto- their benefits, and the feasibility of operating andwhich they are exposed, and the duration of expo- maintaining them -but this is seldom the answer.sure are the key parameters that determine the m Tig them underscis the ancer.economic cost. To estimate how emissions from Ti iem nesoe h motneo econoic cst. o esimat howemisionsfrom cross-sectoral, multiprong approach. The World Bank,different sources contribute to human exposure, asssects it uliprong through Wold Bank,the first step is to model dispersion of pollutants as it assists its client countries through policy dialogue,and the resulting ambient concentrations. Emis- programs, and investments, can help address complexsions from tall stacks are dispersed far longer dis- environment challenges such as urban air quality

management. This support can be most effective if the

14 Urbani Air Quiality Management

Bank helps client countries embark on the above steps Where transport has been determined to be ain a way commensurate with their internal capacity, main source of urban air pollution problems, addi-builds on lessons from cities that have gone through tional targeted measures should be identified andthese steps, and integrates recommended measures- implemented. In general, measures to mitigate thepolicy changes and cost-effective interventions-into negative effects of pollution might focus on separat-its policv dialogue and its sectoral programs and ing pollution sources and receptors, reducingprojects. polluting activities, reducing the pollution character-

istics of these activities, and using filtering devices to

Vehicle emissions abatement measures and control emissions. Not all of these alternatives aretheir cost-effectiveness available for all pollutants and all sources. Changing

the location of the pollution source may be an effec-As noted above, vehicle emissions, which occur near

tive stratesv for pollutants such as particulate matterground level, cause much greater human exposure to gy f p

that have especially damaging health effects in theharm-ful pollutants within a few tens of meters than tha haeepcal aaig,elhefcsihharemfuliolunts withinour at fewevtens ometers, tchan vicinity of the pollution source. Urban planning, zon-dlo emissions from sources at elevated levels, such as

ing, and other land use regulations can influence urbanpower plants, for which the impact would not be lo- air quality through microlevel decisions. These mea-calized. Furthermore, most particulate emissions from

vehicles fall into the fine particulate range, now widely sues, howee,are not neary effectiv forregared a thesizefracion ost amagng t hu- persistent pollutants such as heavy metals or for those

regarded as the size fraction most damaging to hu- with significant regional impacts such as sulfur diox-man health (in contrast to coarse particles). Pollution ide and ozone. Nor do changes in the geographicalabatement in the transport sector, therefore, is likely distribution of emissions sources, by themselves, af-to be a key part of urban air quality management strat- fect the greenhouse gas problem, although if planning

egies in a growing number of cities. and zoning measures reduce traffic, that will also re-Tackling air pollution from the transport sector adznn esrsrdc rfi,ta ilas eTackingair olltionfro thetraspor setor duce greenhouse gas emissions. It should be noted that

is not necessarily a high priority for every targeted transbouna ias em increasingly recogedtransboundary impacts are increasinglv recognized

pollution reduction program. The principal sourceseven for pollutants -such as fine particulate matter -

of the emissions that contribute to ambient concen- ta eepeiul osdrdt ealclpolmtrations must first be identified. In the short run, it

could be more cost-effective to concentrate on reduc- Using others'experiences: Risks and bene.,tsing pollution from such sources as household use of usn the epeiences:ra sks and benefits

coalandbiomss fuelood crp reidus, dng,and Because the optimal strategy and the best choice ofsoal on) fiormheatin, cooki cropresicluesLung, and oteurabatement measures are location-specific, merely "im-so on) for heating, cooking, and other purposes. potn'rgltosfo ohrcutismyntb

porting" regulations from other countries may not beThis is not to say that nothing should be done tothe best solution. This is not to say that every city has

mitigate emissions from the transport sector withoutto design mitigation measures from scratch; much can

a thorouah assessment of all sources. There are sever- Z" be learned from experience elsewhere. Furthermore,al "no-regrets" steps, such as the phaseout of lead in

some measures, such as the phaseout of lead in gaso-gasoline and the correction of the quantity and quali- line, are, in essence, universally applicable to all majortv of lubricant used in two-stroke engines, that should . Ibe puse ihu atn frandphivsi cities. It iS nevertheless important to understand thebe pursued without waiting for an in-depth investi- reasons for the adoption of various measures in dif-gation. Other potential win-win measures that can ferent parts of the world and to distinguish which arehave important positive environmental benefits are likely to be effective in a specific situation and whichdescribed be]ow. Aggressive targeted emissions abate- are unlikely to be suitable. The guiding principle forment measures, such as adoption of strict Western the selection of strategies should be the balancing ofemissions standards (for example, European Union costs and benefits. This means concentrating on vehi-emission standards for 2000-2005), however, should cles driven in densely populated areas, particularlynot be recommended in developing countries within cities with unfavorable meteorological conditions

out a better understanding of the local situation. (for example, a low mixing layer).

Environmental Concernis and Priorities in Urban Air Quality Management 15

It is important to distinguish between strategies Improved traffic management. Traffic management

that use cost-effectiveness as the principal criterion and yields significant economic benefits because it decreas-

those that promote the best available technology es congestion and improves mobility. Traffic

(BAT). Examples of the latter include adoption of the congestion reduces average speed and increases emis-

most advanced fuel and vehicle technologies from sions (except for NO.). An analysis of traffic speed inNorth America, the European Union (EU), and Japan. Bangkok and Kuala Lumpur suggested that the effectThese are very expensive measures designed to make on emissions of increasing vehicle speed from 12-15vehicles that are already relatively clean (in compari- kilometers per hour (km/h) to 30 km/h would beson with those found in developing countries) even equivalent to installing three-way catalytic convert-cleaner. Current standards and technologies in indus- ers in 50 percent of the cars in these cities. Improvedtrial countries effectively amount to mandating the traffic management thus confers environmental ben-manufacture of new vehicles with extremely low emis- efits because of the lower emissions intensity of traffic.sions - so low that exhaust measurements are actually Traffic-management measures such as coordination of

becoming difficult-and the use of fuels to match traffic lights are generally beneficial.state-of-the-art vehicle technology. Importing these Experience suggests, however, that efforts to re-standards would require a large allocation of resourc- duce congestion in the short run can invite greateres for this purpose and is unlikely to prove motorization in the long run, leading to further con-cost-effective, given the conditions in developing gestion. A 1994 report commissioned by the U.K.countries: large numbers of highly polluting in-use government concluded that increasing the capacity ofvehicles and a culture that does not attach importance the road network eased congestion only temporarilyto vehicle maintenance. The economic cost to society because it generated additional traffic, underminingof such measures should be carefully examined, in the original objective. A recent study by the U.S. En-view of the many competing and compelling claims vironmental Protection Agency (US EPA) suggestedon the limited resources available - such as provision that up to half of the annual U.S. traffic growth of 2.7of access to clean water, adequate health care, univer- percent could be a result of construction of added roadsal primary education, and so on. capacity.

In some instances governments have adopted A measure imposed in Mexico City in 1989 wastechnology-specific policies to reduce vehicle emis- meant to reduce traffic volume but had the unintend-sions. Examples include mandatory catalytic ed effect of adding high emitters to the vehicle fleet.converters in new vehicles and a ban on the use of Under the Hoy no Circula scheme, vehicles had to staytwo-stroke-engine vehicles. A rationale for following off the road one day a week, depending on the lasttechnology-specific rather than emissions-based poli- digit of the license plate number. During the firstcies might be the difficulty of monitoring the latter. months of implementation, traffic volume decreasedThe cost-effectiveness of technology-specific policies dramatically. Many households, however, soon pur-needs to be carefully considered, as do the socioeco- chased an additional vehicle -typically, old andnomic impacts of, for example, banning certain polluting - to get another license plate number so thatvehicles or prohibiting traffic in certain areas. household members could drive every day without

restrictions.Potential win-wini mneasuires A much more successful version of this scheme

A number of measures that are typically undertaken is Bogota's Pica y placa system. The exclusion in thisto pursue other primary objectives are likely to gen- case is for two days a week, but it applies only to peak-erate environmental benefits as well. The long-run hour use of vehicles. Another reason that Pica y placa

sustainability and real-world interactions of these has reportedly avoided the shortcomings of themeasures have to be kept in mind; some promising Mexico City plan is that it was part of a more thor-initiatives have backfired. There are also measures in oughgoing strategy to change the proportions ofthe area of vehicle operation and maintenance that transport modes used ("modal split"). Other aspectssave costs for drivers and reduce emissions. of the program included a "car-free day" experiment

116 Urban Air Quiality Management

and a major investment in Transmilenio, a high- Box 2. Promoting nonmotorized transportperformance, segregated busway system.

Traffic demand mnanagemen t. Because vehicle own- Nonmotorized transport (NMT) is used in de-ership is primarily income-elastic, vehlicle usage and veloping countries predominantlv by those who

traffic volume increase aseconomiesdevelop.Tcannot afford motorized transport rather thantraffic volume increase as economies develop. The asamte fcoc.Teueo M smras a matter of choice. The use of NMT is moredesire for more space is also income-elastic, resulting widespread in densely populated areas, wherein urban sprawl. There is a question as to whether and the distances traveled tend to be short. A policyto what extent the growth rate of traffic volume can question is to what extent government interven-be controlled in the longer run through demand man- tion -such as introducing stringent parking re-agement (for example, provision of public transport, strictions and constructing safe bicyclefiscal measures, areawide licensing, pricing instru- routes -can prevent NMT users from switchingments such as electronic road pricing in urban areas, to motorized transport or can at least delay the

, switch, particularlv given the public perceptionand preferential treatment of high-occupancy vehi- ,icles). Available studies indicate that in industrial of NMT as transport for the poor.

countries the long-run, own-price elasticity of gaso- In many developing countries bicycles are ownedline consumption may be significant enough to make by middle-income households rather than by thefuel taxation a potential policy instrument for reduc- poorest segment of society. There is often a stronging vehicle usage and kilometers traveled. A World gender bias in the use of bicycles, with most us-Bank studv concluded that judicious use of a tax on ers across a sample of countries being men. Ingasoline could save the citizens of Mexico C av USs110 cities in developing countries the typical bicycle

user is an emplov7ed man between 25 and 35million a vear more than would an otherwise well- uyears of age. Many bicycle users prefer bicycles

designed control program with no gasoline tax to public transport for reasons of speed, conve-

(Eiskeland and Devarajan 1996).3 nience, and cost.In developing countries the mode of choice for

accessible public transport, given budgetary con- As an example of positive policy intervention,straints, is buses. Dedicated bus lanes are seriouslv in the two cities where the World Bank supportedconsidered for this reason. Curitiba is often cited as NMT infrastructure investments -Lima, Peru,an example of the reduction in transport fuel usage and Leon, Nicaragua-the modal share of NMTthat can be achieved through an extensive network of is reported to have increased.bus routes. The questions are, can use of buses alone Source: I-ce 2000.

have a significant impact on motorization, and howlarge would the benefits have to be to justify the scale harmful emissions. An example is the addition of ex-of investment required for a measurable impact? It cess lubricant of the wrong type to gasoline formay be that in form ulating public transport strategies, two-stroke engine vehicles. A common practice is toconsideration of mobility and access will determine add two or three times the amount of lubricant rec-the outcome and environmental benefits will play only ommended by the vehicle manufacturer-often in the

a rninor role. mistaken belief that this will increase fuel economy -

Another area that the World Bank is exploring while using substandard quality lubricant that doesas a means of curtailing motorization is elimination not mix substandard does no t p des

of inpedmens tononmtorzed ransort(Box2). not mix well with gasoline and does not provide suf-of impediments to nonmotorized transport (Box 2). ficient protection against engine seizure. In reality thisMeasures of this kind include building more sidewalksandi bicycle lanes, making streets more pedestrian practice accelerates the fouling of the engine and in-

creases particulate emissions. Bv reducing the amountfriendly, and making bicycles more affordable by re of lubricant added and switching to proper lubricantducing import tariffs. An added motive for looking manufactured for use in vehicles, drivers can simul-into this set of measures is that nonmotorized trans- taneously save money, reduce emissions, and helpport is the form of transport often used by the poor. maintain the vehicle better (Kojima, Brandon, and

Proper vehiclc opcra tion and maintf enance. Certain Shah 2000). Another practice is overfueling diesel en-practices are costlv to vehicle drivers and increase

gine vehicles, often because of a misapprehension that

Environmenttal Concerns anyd Priorities in Urbant Air Qinality Mannagemilenit 17

this will increase power. In practice, overfueling may sions standards will be more effective if the standardsnot yield any greater power output, but it does result are set so that only a small fraction of vehicles is esti-in lower fuel economy and much greater smoke emis- mated to be in noncompliance; standards can then besions. Yet another example is allowing the injection gradually tightened.timing of diesel engines to slip, resulting in overly lmproving vehlicle technology. Largely in responseretarded timing. The consequences are lower fuel to stricter vehicle emissions requirements, consider-economy, the mixing of diesel with lubricant (result- able progress has been made in improving the vehicleing in lubricant acidification and, eventually, engine hardware for reducing emissions. For gasoline vehi-wear), and increased smoke emissions. By properly cles, efficiently operated three-way catalytic convertersadjusting the injection timing, all of these problems can reduce exhaust CO and hydrocarbon emissionscan be reduced. by as much as 95 percent and NO, by over 75 percent.

For these pollutants, catalytic converters are by far theTargeted pollution abatement measlures most effective means of reducing gasoline-vehicle ex-

Tightening vehicle emission standards. Most countries haust emissions. Modern diesel engines, too, are muchthat have large cities with serious air pollution prob- cleaner than those produced in the past.lems have vehicle emissions standards, although these The United States, the EU, and Japan have the

most stringent vehicle emissions standards and fuelstandards may be outdated or unsuited to local con-

specifications. These countries are pursuing the bestavailable technology for further reducing emissions

emissions control through standards are emissions from new vehicles. The control measures include astandards that differentiate vehicles by type and age, combination of dramatic reduction of sulfur in gaso-

means of measuring emissions levels accurately, and line and diesel (to extend the useful life of the catalyst

methods for enforcing the emissions standards, and to enable new technologies for reducing NO, andOne prerequisite for mounting an emissions con- particulate emissions); new measures for control of

trol program is a reliable vehicle registration record. tailpipe emissions (for example, particulate traps withMany developing countries are known to issue the regeneration for diesel engines); emerging vehiclesame registration number to two or more vehicles, and technologies such as direct injection gasoline engines;all too often there are no records of vehicle registra- and the use of alternative fuels for vehicles with verytion by vehicle age. Attrition of vehicles is often not low or zero emissions (as mandated in California). Therecorded in the vehicle registries. Addressing such rest of the world will probably adopt similar standards

deficiencies in the database should be given high pri- and technologies eventually, but for developing coun-ority. tries the immediate issue is how to phase in

Vehicle emissions standards are rarely enforced appropriate measures cost-effectively.in developing countries. Whether to tighten vehicle Inspection and maintenance (IIM) programs. Vehi-

emissions and fuel standards should be weighed cle emissions standards and technologies are notagainst the alternative of ensuring that existing stan- effective without proper maintenance. Poorly main-dards, however lax, are enforced. Old and poorly tained vehicles are high emitters and are responsiblemaintained vehicles that are not in compliance are for a disproportionate fraction of total vehicle emis-generally responsible for the greatest part of vehicle sions. A well-run, corruption-free I/M programemissions. It may not be cost-effective to devote in- should, in principle, be able to mitigate transport pol-creased resources to reducing emissions from new lution by strengthening the enforcement of emissionsvehicles (which are, in any event, much cleaner than standards. An I/M program cannot be successful un-old ones) without addressing the problem of gross less gross emitters are identified accurately and unlesspolluters. vehicles that fail are repaired promptly. The latter con-

If the emissions standards are so strict that a sig- dition, in turn, depends on wide availability ofnificant fraction of the existing vehicles is bound to adequately trained and equipped repair mechanics.fail the emissions tests, widespread corruption and Yet in many developing countries this service infra-evasion are likely to ensue. The enforcement of emis- structure is lacking, partly because, when emissions

18 Urban Air Quiality Managettment

standards and other standards for in-use vehicles are percentage of the total vehicle fleet, the program cannot enforced, there is only a small market for repair target a limited number of these vehicles, therebymechanics. avoiding major market perturbations, keeping the

The usual reason for not properly maintaining overall cost of the program low, and making it possi-vehicles is cost. Certain maintenance practices, how- ble to design a cost-effective scheme.ever, would actually yield cost savings. An example Offering financial incentives to remove olderis use of the correct kind and amount of lubricant in vehicles from the market entails a number of difficul-the two-stroke engines common in Asia. At a mini- ties. The government's entry into the market shifts themum, wide public education campaigns should demand curve for old vehicles, possibly raising theirbe undertaken to promote these cost-effective prices. A vehicle is typically retired when the cost ofpractices. repairing it exceeds the market value of the vehicle

An I/M system based on centralized, high-vol- after repairs are made. If prices of old vehicles rise,ume, inspection-only centers, as in Mexico City, is some owners may decide to keep and repair their oldconsidered more effective than a decentralized sys- vehicles instead of scrapping them. Generally, pricestem with a large number of private garages are higher in urban centers than outside, giving own-participating. Computerizing emissions measure- ers of old vehicles outside the city an incentive to bringments as much as possible to minimize tampering is their vehicles to urban centers and sell them.another useful measure. The private sector can be an There are important distinctions between cash-

important partner in operating I/M4 programs (Box for-scrappage (where there are no requirements for3). A traditional I/M program may be supplemented replacement vehicles) and cash-for-replacement. Ac-by a scheme using remote-sensing devices (which can cording to an analysis prepared for the Europeanmeasure more than 4,000 cars per hour on a continu- Conference of Ministers of Transport (1999), cash-for-ous basis) to identify gross emitters for more intensive scrappage mav yield a reasonable benefit-cost ratio,testing. depending on program design, whereas the cash-for-

When emissions standards are enforced to a rea- replacement schemes implemented to date are said tosonable extent under I/M programs, the cost of be much less cost-effective. Income constraints makeowning old vehicles effectively increases, promoting cash-for-replacement particularly difficult to designvehicle renewal. Empirical evidence from Spain sug- in developing countries. Owners of gross emitters wvithgests that changes in the I/M program may have had high annual VKT are often those who are not in a po-a considerable effect on trends in first-time vehicle sition to purchase much newer vehicles. By requiringregistration (European Conference of Ministers of that the replacement vehicles be new or relatively new,Transport 1999). the scheme fails to attract the vehicles that ought to

Vehicle retirement and scrappage programs. Several be selected for the program on the basis of cost-ef fec-vehicle retirement programs, targeting mostly passen- tiveness. Delhi (India), however, has conducted ager vehicles, have been conducted in North America successful vehicle replacement program for auto rick-and Europe (including Eastern Europe). For the suc- shaws combined with a mandatory phaseout of oldercess of such a program, it is important to be able to vehicles.identify gross emitters with high annual vehicle kilo- Experience with vehicle retirement schemes thatmeters traveled (VKT) and a reasonable remaining life. target heavy-duty vehicles is limited. These schemesHigh emitters are not necessarily old vehicles, al- merit further examination. In many developing coun-though in the absence of detailed data, vehicle age is tries, particularly those in which particulate emissionsoften used as a selection criterion. are the most serious air pollution concern, commer-

If the number of vehicles retired is very small or cial vehicles (buses, trucks, and taxis) contribute thenegative in comparison with the number that would most to urban air pollution. Here, the vehicle purchas-have been retired without the program (as was the ers are not households but, for the most part,case in Spain in 1995), the resources spent on imple- enterprises and business owners. Hungary introducedmenting the program represent a deadweight loss for a retirement scheme for heavy-duty vehicles by offer-the economy. If the number of high emitters is a small ing US$3,600 (in 1997 dollars) for replacement of an

Environmental Concerns and Priorities in Urban Air Quality Maniagemlienit 19

Box 3. Private sector operation of an inspection and maintenance program in the Mexico CityMetropolitan Area

Mandatory testing for vehicle emissions in the Mexico City Metropolitan Area (MCMA) was first intro-duced in 1988. The emissions standards, which initially applied to hydrocarbons and carbon monoxide,were tightened progressively in 1994 and 1996, with further changes introduced in 1999. In 2000 limits fornitric oxide were established.

The emissions testing program in the MCMA has evolved through several phases since its inception. Ini-tially, tests were carried out in government test-only centers and in privately owned test-and-repair ga-rages. By 1992 all vehicles circulating in the MCMA had to display a certificate showing that they hadpassed the annual emissions test or be liable to a fine imposed by traffic police.

The use of test-and-repair garages in the absence of a strong enforcement program made it possible andprofitable for many garages to issue false pass certificates. Estimates suggested that as many as 50 percentof vehicles obtained passes incorrectly. This led to the closing of all test-and-repair centers and the estab-lishment of privately owned and operated "verificenters" (multilane, test-only centers) with much im-proved protocols for discouraging testers from issuing false pass certificates. Thus, the private sector inMexico was able to provide testing centers competitively, but the government had to regulate the sector inorder to prevent profit-seeking activities, such as issuance of false passes, that were counter to the publicinterest.

The experience in Mexico City shows that for a testing program to be effective, several conditions have tobe met:* A legal framework has to be established that allows sanctions to be applied for failure to carry out the

testing protocols correctly. The testing stations must be subject to monitoring by independent bodies,and in cases of noncompliance, sanctions must be applied.

* The certificate for passing the test has to be easy to monitor, and there should be sufficient monitors(for example, traffic police) to ensure a high probability of catching vehicles that do not display sucha certificate.

* The fine for not displaying or not having a legal emissions test certificate must be high enough to actas an incentive to pass the test.

* The testing technology has to be able to prevent the use of temporary "tuning," which enables avehicle to pass the test but cannot be sustained for regular driving. In the absence of such a technol-ogy, motorists and garages become adept at circumventing the purpose of the testing procedure-toidentify high-polluting vehicles.

* All testing centers must be subject to equally rigorous implementation of protocols and inspection oftheir procedures; otherwise, owners of the highest-polluting vehicles easily identify the "softest"centers for passing the test.

* The optimal number of centers, relative to the volume of traffic to be tested, has to be licensed. If thereare too many small centers, the rigor of the tests tends to be watered down as each garage tries toincrease market share.

Source: World Bank (2001).

old bus with a new one that complied with the most United States, offer a great deal of flexibility by al-recent emissions standards or for replacing its engine. lowing the option of fuel certification on the basis ofSimilar incentives were given for old trucks. In the vehicle emissions rather than fuel composition. In ad-early 1990s Chile used an effective scrappage policy dition, fuel specifications in the United States arecombined with tax incentives to remove the most-pol- regionally differentiated. The combination of theseluting diesel buses from the urban transport fleet. two factors has given a tremendous cost advantage to

Fuel quality improvement. All countries have some the U.S. refining sector, which has the freedom to seekkind of fuel standards. Some countries, such as the the least-cost solution for meeting specific vehicle


emissions standards while adjusting the re- Box 4. Phasing out leaded gasoline: Misconceptionsfinery product slate according to market and factsdemand. Most other countries stipulate the

composition f each fuel.Although unleaded gasoline was first introduced in thecomposition of each fuel. United States and Japan to protect catalytic converters, coun-

For the World Bank's client countries, tries around the world have accelerated the phaseout ofthe first step in improving the quality of leaded gasoline in response to emerging medical evidence oftransport fuels is to phase out lead in gas- the impacts of lead on human health and especially on theoline. Lead has historically been added to intellectual development of young children, even at low lev-gasoline as an octane enhancer. Because of els of exposure. In countries with refineries, the first step to-its toxicity, there is a worldwide ward phasing out lead is typicallv the reduction of gasoline

lt OlCt,ter Sagrowing worldwlead concentration (Faiz, Weaver, and Walsh 1996). This alonemove to ban its use in gasoline (Box 4). can help brng about a considerable decrease in the level ofMore than three-quarters of the gasoline lead in the general public.sold in the world today is unleaded. Anumber of developing countries, includ- Despite significant progress worldwide in eliminating leading Bangladesh, Brazil, Honduras, in gasoline-by the end of 2000 over 45 developing and in-Hungary India, the Slovak Republic, Thai- dustrial countries had banned its use -there are persistent

land, and Vietnam have alreadv misconceptions about unleaded gasoline (Lovei 1998, 1999).land, and Vietnam have already One is that only cars equipped with catalytic converters can

eliminated lead in gasoline, and several use it; in reality, all gasoline-fueled cars can. Another is thatother countries are planning to ban lead- many, if not most, old vehicles running on leaded gasolineed gasoline in the near future. will suffer from valve seat recession and, ultimately, engine

In the absence of other significant failure if switched to unleaded gasoline. Lead does act as asources of lead, eliminating lead in gaso- lubricant and laboratorV tests have demonstrated that with-line can reduce ambient concentrations of out it, soft engine exhaust valve seats in old vehicles can suf-

fer from valve seat recession if driven under severe conditionslead to less than 0.2 micrograms per cubic (that is, heavy loads and high speeds). In practice, however,meter (gg/m 3 ) and the level of lead in valve seat recession has seldom been found to be a problemblood to less than 5 micrograms per decil- in most countries that have eliminated lead. In Latin Americaiter (pg/dl). Many health organizations and the Caribbean, where lead phaseout has progressed rap-consider 10 mg/dl to be the threshold idly in recent years, none of the countries have observed anyabove which action is called for. marked increase in valve seat problems. Thailand introduced

above whithactio catalvtic converers ca lubricating additive to protect old engines from potentialCars without catalytic converters can recession but stopped its use after it was demonstrated that

run on either leaded or unleaded gasoline, the vehicles did not need it.but cars equipped with catalysts must useunleaded gasoline because lead deacti- In the early days of lead elimination, the phaseout process invates catalysts permanently. The some cases lasted for decades, as was the case in the United

aviaiivof unleaded gasoline through- States. More recently, several countries, including the SlovakRepublic and Thailand, have completed lead removal in four

out a country is a prerequisite for the in- to five years. Countries that rely to a significant extent ontroduction of catalytic converters. gasoline imports can switch to unleaded gasoline even faster.

Leaded gasoline is not the only source Bangladesh, El Salvador, Georgia, and Vietnam eliminatedof human exposure to lead, and other gasoline lead in less than a year.sources should be tackled in parallel. Fur-

ofurcesshoulb thed goinellenn FSuch a swift transition to unleaded gasoline has a number ofthermore, manv advantages. Little investment in the distribution infrastruc-components that are used to increase oc- ture is needed because a dual distribution system does nottane after elimination of lead have adverse have to be set up to segregate leaded and unleaded gasoline.health effects of their own. Excessive pres- Minimizing the transition period during which both leadedence of benzene, olefins, and total gasoline and unleaded gasoline are marketed also minimizesaromatics in unleaded gasoline are a mat- the chances of cross-contamination and of misfueling cata-

lvst-equipped cars with leaded gasoline.ter of concern. It is necessary to ensure that - c w l goverall emissions of harmful pollutants are Source: Authors' compilation.

Environlmenital Concerns anid Priorities in Urban Air Quality Management 21

kept under control at least cost to society. By control- ed propane vehicles to take advantage of engines withling gasoline volatility and adjusting refinery slightly higher compression ratios than can be used

operations and processing units, all these blending with gasoline.

components can be managed at a reasonable cost in The main potential problems in introducing LPGthe drive for lead phaseout (Kojima and Mayorga-Alba to the transport sector have to do with sources of sup-1998). ply and the distribution system. Several countries

Fuel quality requirements are location- already import significant amounts of LPG. India,specific. Factors to consider include climate conditions, Pakistan, and Sri Lanka, for example, import about apollutants present in elevated ambient concentrations, third or more of their LPG demand, making it diffi-vehicle fleet characteristics, the state of domestic re- cult for LPG to become competitive on a cost basis.fineries (if any), and other sources of emissions. On the distribution side, LPG is stored under pres-Although lessons from other countries should always sure both inside the vehicle and in the refueling tanks.be examined and taken into account, each situation Special refueling equipment is needed to transfer theshould be studied separately. Fuel specifications pressurized liquid from storage tanks to the vehicle

should not be simply imported from other countries and to ensure that no LPG escapes during refueling.without first considering local conditions. Countries The required investments in LPG distribution and re-that have domestic refineries merit special attention fueling stations have not been made in mostbecause refinery processes are integrated and chang- developing countries, constraining widespread use ofing the specifications of one fuel could affect the LPG.quality of other fuels and overall refinery economics. COMPRESSED NATURAL GAS. CNG yields essentially

Use of alternative fuels. Vehicles that use gaseous no VOC or SO emissions. Methane, which constitutesfuels such as liquefied petroleum gas (LPG) and com- N

presed ntura gas(CNG emi coniderbly ess the bulk of CNG, has an antiknock index of over 120.pressed~ naua'a CG mi osdrbyls Dedicated CNG vehicles can therefore take advantage

particulate matter than conventional diesel vehicles, ofcte hig o ehnumer of therfue and ateataand hence the substitution of these fuels for dieselwould bring about significant public health benefits. high compression ratio. CNG is safe in the sense that,Vehicles powered by electricity have zero tailpipe because natural gas (unlike LPG) is lighter than air, ifemissions. The use of these alternative fuels, all of the gas escapes, it will not lie along the ground or en-which are being piloted in a number of developing ter sewerage systems.countries, is described in more detail in this section. In practice, the composition of pipeline naturalOther alternative fuel options include alcohols and gas varies depending on the source and processing ofbiofuels, but they are not economic under most cir- the gas, as well as the time of year. As a result, notcumstances and usually require large subsidies (Faiz, only does the fuel octane number vary, but the heat-Weaver, and Walsh 1996). ing value can vary by as much as 25 percent, affecting

LIQUEFIED PETROLEUM GAS. LPG is a mixture of light vehicle performance. Moreover, when used as a fuelhydrocarbons, mainly propane/propene and bu- in vehicles, the heavier hydrocarbons in natural gastanes/butenes. LPG is easier to distribute and store can condense, and the condensation and revaporiza-than CNG; it requires pressures ranging from 4 to 13 tion lead to fuel enrichment variations that affect bothbar, compared with 200 bar for CNG. Among LPG's emissions and engine performance.good environmental features are its limited amount A vehicle capable of running on either CNG orof highly reactive hydrocarbons and its low sulfur gasoline suffers a power loss of about 10-15 percentcontent, in comparison with gasoline or diesel. It does, when running on CNG. In addition, the extra weighthowever, contain olefins, which are photochemically of carrying two fuel systems detracts from the effi-reactive. ciency of dual-fueled vehicles. With its compression

Although not as high in octane as natural gas, requirement of 200 bar, CNG is expensive to distrib-LPG has excellent antiknock characteristics. Propane ute and store. Depending on the fueling system,has an antiknock index (the average of the research refueling can take a long time, and this in turn mayand motor octane numbers) of 104, allowing dedicat- serve as a disincentive for switching to CNG.

22 Urbani Air Quality Management

The basic requirements for the long-term viabil- diesel begins to compete with CNG, capturing theity of CNG vehicles are an existing distribution system market from CNG. In Argentina today, as much as 50for natural gas, fuel prices that are not distorted by percent of all new taxis is said to be powered by die-subsidies, and a favorable legislative and regulatory sel, directly competing with CNG.atmosphere. Support for the elimination of distortion- Poor conversion of existing vehicles to CNG canarv subsidies is a key element in the World Bank's actually increase vehicle emissions. In Chile, whereassistance to client countries in the energy sector, and tests for converting to CNG have been carried out withit should also make the use of cleaner fuels more com- taxi fleets, the conversions failed because of a poorpetitive. Fleet operations driven by economic rather choice of aftermarket gasoline-to-CNG conversions;than emissions concerns tend to be most successful the option of a fully factory-built CNG car would haveand sustainable in the long run. A failed example that been more satisfactory. It is very important, when ret-illustrates this point comes from New Zealand. Start- rofitting existing vehicles, that conversion be carrieding in the early 1980s, an aggressive government and out properly, ensuring customer satisfaction as wellindustry program provided financial incentives, in- as achieving the expected emissions reductions.cluding subsidies, that led to the conversion of 110,000 The existing diesel and natural gas pricing struc-vehicles to natural gas by 1986. When the government ture worldwide provides little incentive for switchingwithdrew its support, however, the market essential- from diesel to CNG. Furthermore, there is a growingly died, and only about 10,000 natural gas vehicles view in the United States and Europe that "clean" (par-remain today-a decline of 100,000 from the peak. ticulate trap-equipped) diesel buses are nmoreClearly, the program design was not sustainable. Ac- cost-effective than CNG buses for reducing harmfulcording to the International Association for Natural emissions. While clean diesel may be many years awayGas Vehicles, "governments that believe that all they in developing countries, these trends in industrialneed is a two- to three-year kick-start are wasting their countries do affect the future of the auto industry andtime and money" (Cumming 1997). vehicle technology worldwide.

For there to be an economic incentive to convert Finally, if natural gas pipelines are not alreadyto gas, the prices for CNG at retail outlets need to lie in place, the incremental cost of setting up a distribu-in the range of 50 to 65 percent of the fuel being re- tion and refueling infrastructure would be too high toplaced. It is difficult to institute and maintain an make CNG vehicles economic. As an extreme exam-effective CNG program without the support of a con- ple, selecting CNG buses for the purpose of reducingsistent pricing policy, and, given fluctuating oil prices, particulate emissions in a city that does not yet havesuch a policy may not be easy to maintain. The loss of a natural gas pipeline would be costly and not eco-tax revenues on fuels that are replaced by untaxed nomically viable.natural gas is a disincentive for government support ELECTRIC. The battery of an electric vehicle is cen-for CNG. tral to its fuel system and its success. Lead-acid

Historically, CNG has been substituted for gaso- batteries are currently used in electric vehicles, andline because gasoline is taxed heavily in many parts there is no consensus as to what type of battery mayof the world, making it easier to maintain the price be best for the future. Because it takes 6 to 10 hours todifferential between gasoline and CNG that is need- recharge batteries of ordinary electric vehicles, re-ed for the latter to be economical. For example, the charging would generally be done at night. Lead-acidretail price of premium gasoline in Argentina, the larg- batteries emit hydrogen as they recharge, so indoorest CNG vehicle market in the world, is as much as recharging facilities must be well ventilated.US$1.00 per liter. From the point of view of urban air The main disadvantages of electric vehicles, inpollution, however, it would make more sense to re- comparison with other alternative-fuel vehicles, areplace diesel, rather than gasoline, with CNG in order the length of time needed for recharging them, theirto reduce particulate emissions. In almost all devel- short ranges, and their even higher purchase costs thanoping countries, diesel is not taxed nearly as much as other alternative-fuel vehicles. The economics of elec-

gasoline, increasing the difficulty of making the oper- tric vehicles depends, among other things, on the price

ation of CNG vehicles economical. In the extreme, of electricity. The power sector in many developing

Environmenital Concernis antd Priorities in Urbani Air Qniality Managemenit 23

countries is currently undergoing reform and restruc- levels for new vehicles rather than mandating cata-

turing. The long-term viability of electric vehicles lytic converters per se. Retrofitting in-use vehicles

should be evaluated from the standpoint of market- with catalytic converters is typically not considered

based energy pricing. Given the current state of the cost-effective.

technology, electric vehicles would not be expected Unfortunately, examples of uncoordinated pol-

to have widespread application, but with carefully icies are not difficult to find. In one country the

considered government intervention, they could play government proposed mandatory installation of oxi-

a useful, although limited, role in extremely polluted dation catalysts in heavy-duty diesel vehicles

traffic corridors. It is also worth mentioning that sig- without taking measures to lower the sulfur level in

nificant efforts are now being directed to hybrid diesel sold on the market-0.7 weight percent, or

electric-internal combustion engines rather than pure 7,000 wt ppm. At such a high sulfur level, the life of

electric-engine vehicles. the catalyst is shortened, and the oxidation catalyst

Cross-sectoral coordination of policies merely oxidizes sulfur completely to sulfur trioxide(S03). S03, in turn, eventually forms sulfate particu-

There are very close linkages between policies under- late matter and so significantly increases particulate

taken in various sectors, and these policies should be emissions. In another country the government man-

coordinated and harmonized to achieve optimal re- dated catalytic converters in passenger cars without

sults. As is stressed in the next section, coordination specifying precisely the emissions levels to be met-

is especially important for policies targeting vehicle an omission that could defeat the purpose of the

technology and fuel quality. Also discussed are the new requirement. In other cases, catalytic convert-

economic, socioeconomic, and environmental interac- ers have been mandated even though there was no

tions that have to be considered in efforts to eliminate reliable system for providing unleaded gasoline.

gross emitters from the vehicle fleet and in liberaliza- A number of fuel-related issues need to be con-

tion of trade in fuels and vehicles. sidered in formulating environment, transport, and

Ve)1icle teclmnology, fuel qiialihj, annd related policies energy policies:1. For such pollutants as lead and SO, emissions lev-

The promotion of catalytic converters provides a strik- els depend solely on fuel composition. If high

ing example of the complex interactions among ambient concentrations of these pollutants origi-

transport, energy, and environmental policies. A num- nating from transport are a public health concern,

ber of conditions need to be satisfied if catalytic eliminating lead in gasoline and reducing sulfur

converters are to function effectively: in transport fuels will be effective. In fact, high

* Wide availability of unleaded gasoline and, pref- ambient concentrations of SO, per se from vehicles

erably, complete phaseout of leaded gasoline to are seldom a problem.5 Lead, by contrast, is ex-

eliminate the chances of misfueling tremely toxic, and the amount of lead emitted from

* Differentiated taxation to discourage misfueling4 vehicles varies linearly with the amount of lead in

* A reasonably low level of sulfur in gasoline, pref- gasoline. Phaseout of lead from gasoline is there-

erably less than 500 parts per million by weight fore usually a sensible mitigation measure.

(wt ppm) 2. In many developing countries the vehicle fleet is

* Specification of emissions performance levels dominated by poorly maintained, often old, ve-

and the length of time during which the catalyst hicles. As long as large numbers of these vehicles

system must meet those levels are on the road, the cost-effectiveness of tighten-

* Effective inspection and maintenance to ensure ing fuel specifications to North American or EU

that converters are operating properly. standards is questionable. In the United States the

Unless these conditions are met, the additional Auto/Oil Air Quality Improvement Research Pro-

cost associated with the installation of converters may gram (a US$40 million program jointly undertaken

not be justified by the benefits. Even where effective by the auto and oil industries in 1989-95) found

use of catalytic converters is considered feasible, gov- that high-emitting, poorly maintained vehicles rep-

ernments should consider specifying emissions resented only about 20 percent of the vehicle stock

24 Urban Air Qlality Management

but contributed about 80 percent of total vehicle Targeting gross emitters

emissions. Improving fuel qualitv decreased emis- The share of emissions is not uniformly distributedsions~ ~ ~ ~ ~ ~ ~~ ~~~h soharet but notson nerl not muchrml as chang-sions somewhat but not nearly as much as chang- over the vehicle fleet. A fraction of ill-maintained, of-

ing vehicle technology(for example, by identifying ten old, vehicles is typically responsible for aand repairing old vehicles). Similarly, the European disproportionately high amount of pollution from theProgramme on Emissions, Fuels and Engine Tech- transport sector. If these "high emitters" (generally,nologies (EPEFE) found that the spread in emis- commercial vehicles and public transport vehicles,sions levels related to vehicle technologies was including, in some places, two- and three-wheeler taxiswider than the variations attributable to fuels. with two-stroke engines) can be repaired or perma-

3. Sulfur in diesel was lowered to 0.05 weight per- nently eliminated, a considerable reduction incent (500 wt ppm) in 1993 in the United States and pollution can be achieved at a relatively small cost.in 1996 in Europe to meet new standards for par- The implementation of such a scheme, however,

ticulate emissions. This move came after a num- is far from simple. To be cost-effective, any programber of vehicle technology measures had targeting high emitters should identify polluting ve-substantially lowered the carbonaceous contribu- hicdes with high annual VKT operating in denselytion to particulate emissions. In countries where populated areas. Old vehicles in very poor conditionthe carbonaceous component of vehicular particu- may be candidates for retirement. Those that are high-latematterisstillhigh,itmaynotmakeeconomic Iy polluting but are better maintained mav besense to target sulfur in diesel to match North considered for repair or for retrofitting with more re-American and EU fuel standards if the goal is to cent vehicle technology.mitigate particulate emissions from diesel engines. Policies targeting certain types of vehicles should

4. In extreme cases, proposed emissions standards take into consideration their distributional impacts on

are incompatible with the transport fuels actually the poor.

available on the market. For example, Euro 2 emis-sions standards can be imposed only if correspond- Fiscal policies

ing fuel specifications (such as the amount of Fiscal policies include higher taxes on more pollutingsulfur in diesel) are met. Insistence on purchasing fuels and vehicles. Limited attempts have been madeEuro 2-compliant buses when the sulfur level in to retire old vehicles through cash-for-scrappage or

diesel is 5,000 wt ppm is not technically coherent. cash-for-replacement. A pilot program implemented5. Vehicles using different fuel formulations can meet in 1996 in British Columbia, Canada, provides an ex-

the same emissions standards. It is important to ample of modal-shift promotion. Owners of vehiclesunderstand which fuels are costly to manufacture of model year 1983 or older were offered a choice ofand which are not. Annex B contains an example incentives for scrapping their vehicles: cash, or a one-illustrating how use of an inappropriate standard year free transit pass on the local public transportcan lead to excessively stringent specifications for network, worth about 1,000 Canadian dollars. Fifty-fuels and impair flexibility in fuel formulation. two percent of the owners participating in the

6. It is not enough to regulate fuel quality; in some program chose the second option.countries transport fuels are routinely adulterated. Gasoline is taxed at fairly high rates in manyExamples of fuel adulteration that increases vehicle developing countries, but diesel and kerosene areemissions include the addition of (lower-cost) kero- much less taxed (Box 5). A large price differential be-sene, naphtha, or petrochemicals such as toluene tween kerosene and gasoline leads to illegal additionto gasoline and the addition of lead and other of kerosene to gasoline, resulting in higher pollutantheavy metal additives to gasoline downstream of emissions; a large price differential between gasolinerefineries or terminals, as in Central Asia. Regular and diesel encourages a shift to diesel from gasoline-

fuel quality monitoring, together with costly pen- powered vehicles. Examples include the introductionalties for noncompliance, could help enforce fuel of diesel-powered three-wheelers in South Asia and

standards more effectively. the large proportion of diesel passenger vehicles in

Enivironmttiental Concerns and Priorities in Urban Air Qnality Managemzentt 25

Europe. Conversion to diesel may not be favorable Although a large price differential between gas-from the environmental point of view; there is emerg- oline and diesel tends to encourage conversion toing epidemiological evidence that diesel emissions diesel vehicles, it does not necessarily follow thatare more toxic than gasoline emissions. the solution is to narrow the price gap to capture the

Box 5. Fuel pricing policy in Asia and beyond: Getting the incentives right

Around the world, the retail price of diesel is typically lower than that of gasoline, as a result of differentialtaxation. The trend is particularly pronounced in South Asia. In Bangladesh, for example, the retail price ofgasoline was almost double the prices of diesel and kerosene in 1999. The price differential, together withthe low profit margin fixed by the government for the sale of gasoline, has led to the adulteration of gaso-line with kerosene and, as an unintended consequence, to higher emissions from vehicles. In Sri Lanka,where the price of diesel was less than a third of that of gasoline at the time, the ratio between diesel andgasoline consumed reached 7 to 1 in 1999, which is very high by international comparison. Similar trendshave been observed in India and Pakistan. As a corrective action, the governments of Sri Lanka and Indiahave recently increased the price of diesel sharply on several occasions.

There is a sound economic argument for lower taxes on diesel in certain segments of the market: diesel isused in freight transport, agriculture, and industry and, as such, is an intermediate good. It can be shownthat if a specific set of conditions is met-that is, if all final goods are taxed and pure profits have beentaxed away or, equivalently, there is perfect competition and constant returns to scale - the optimal rate oftax on diesel as an intermediate good is in fact zero (Newbery 1988). Since these conditions do not apply inmost developing countries, a nonzero rate of tax on diesel is a way of indirectly taxing final consumption ofthose goods that use diesel as an input and are not directly taxed. Applying a low tax rate to diesel, how-ever, has significant environmental as well as fiscal impacts in Asia. Large tax differences or, in many cases,subsidies (for example in Indonesia) in favor of diesel have led to switching from gasoline to diesel, dimin-ishing the government's principal fuel tax base (gasoline) and promoting the excessive use of diesel. Dieselvehicles emit far more fine particulate matter than gasoline vehicles, and in developing countries, wherevehicles are typically poorly maintained, they are an important source of serious health damages attribut-able to particulate emissions.

There are several considerations when seeking to influence the environmental impacts of diesel use:

* How diesel is used in the transport sector. From the point of view of public health, what is important is theamount of diesel used in urban transport. If the bulk of diesel is used for intercity transport (for example,long-distance trucking and railways), the environmental impact is not as much of a concern as increaseduse of diesel for transport within cities would be.

* Economic incentives for switchling to diesel. There are several ways of reducing the economic incentivesfor using diesel: (a) decreasing the retail price differential between gasoline and diesel (and possiblygiving rebates to industrial and agricultural users of diesel); (b) making it more expensive to own adiesel vehicle for purposes that, in the absence of a large price differential, could just as well be servedby a gasoline vehicle -for example, by taxing light-duty diesel vehicles more heavily than similargasoline-powered vehicles; or (c) using a combination of these two approaches. The first optionaffects the market for diesel fuel, including that used in long-distance transport. The second optiontargets light diesel vehicles more directly (with the exact effect of the tax depending on the design ofthe fiscal measures employed) but is more difficult to implement. In both cases, an evaluation shouldbe carried out of the likely macroeconomic consequences.

* Different diesel technologies. The emissions from diesel-powered vehicles differ by orders of magnitudedepending on the technology employed and, to a lesser extent, the quality of diesel used. In the extreme,state-of-the-art diesel vehicles that use ultra-low-sulfur diesel fuel and continuously regenerating par-ticulate traps can be almost as clean as vehicles that use compressed natural gas. Such advanced tech-nologies are unlikely to offer cost-effective solutions in developing countries any time soon, but theirexistence underlines the point -an important one to keep in mind in formulating incentive policies -that not all diesel vehicles are alike.

Source: Authors' compilation.


environmental externality of diesel emissions. If the (for example, requiring that a certain proportion ofbulk of diesel fuel is consumed outside large cities the vehicle weight or content must be produced do-(by railroads and interurban transport), it may make mestically) are based on the infant-industry argument.more sense to increase vehicle taxes on diesel-engine They often result in inefficiency -and in production

vehicles typically used in intracity transport-that of heavier vehicles, if the percentage is based onis, light-duty diesel vehicles-so that the choice of weight. Higher import tariffs on new vehicles, rigid

diesel versus gasoline vehicles will be financially licensing schemes for imports, and quotas are all likelyneutral for vehicle owners. An option successfully to slow the rate of vehic]e renewal, with potentiallyadopted in Chile is to increase the tax on diesel to adverse impacts on air pollution.:make the price of automotive diesel comparable to Free trade in used cars raises the question of "en-that of gasoline but to give rebates to industrial and vironmental dumping." Among the largest recipientagricultural users of diesel. Another option is to tax markets for used cars are Cyprus, Jamaica, Peru, Sriautomotive diesel more and use a dye to distinguish Lanka, and the Russian Federation. Japan remains theautomotive diesel from diesel for other uses. 6 largest single identifiable source of used-car exports.

Fiscal incentives to support the use of cleaner The forces driving the export of used cars by industrialfuels have been successfully applied. Differentiation countries will become stronger as emissions standardsof excise taxes on leaded and unleaded gasoline in become more stringent and regulations affecting end-

favor of the latter is one example. Another is the dif- of-life vehicle are implemented, as in the EUferentiation of taxes on diesel on the basis of sulfur (Nieuwenhuis and Wells 1999). This may have mixedcontent, as is done in Europe, so that low-sulfur die- results. Where the vehicles exported are relatively new,

sel can be used in urban buses equipped w'ith the environmental impact may not be so serious andmay in fact be positive. (Manv relatively new Japanese

state-of-the-art emissions control technologies such ascars have been exported because of the vehicle inspec-

continuously regenerating traps. tion program, which used to impose large expensesTax structures that discourage the purchase of

Tax stutrstatdsorgheprhon owners when vehicles turned three years old.) Ex-new vehicles -for example, registration fees or excise psorts of gross emitters would be a classic case oftaxes based on the market value of the vehicle - should environmental dumping.

be carefully reviewed and, if possible, revised, since In the interest of environmental protection, thethev do not capture the cost of pollution. Possible

government may limit the age of the vehicles that maymeasures to alter the incentives include lowering or

elimnatng mpot trifs o ne veicls, bolsh- be imported. For example, Hungary set the age limiteliminating import tariffs on new vehicles, abolish- at 10 years in 1991 and progressivelv reduced it to 8,ing the practice of charging vehicle registration fees 6, and finally, in 1997, 4 years. The purchasing pat-proportionally to the book value of the vehicle (which tern of vehicle owners, however, should be carefullymakes it more expensive to own new vehicles than balanced against the expected environmental advan-old ones), and minimizing the tax on the purchase of tage of restricting the import of old vehicles. If, fornew vehicles. In considering any of these measures, example, commercial operators of vehicles are in nothe socioeconomic impact of making it more costly to position to buy relatively new vehicles, an import re-own old vehicles and the environmental benefits of striction based on age would constrain the supply andreducing vehicle emissions need to be weighed. increase the price of replacement vehicles, postpon-

ing the replacement of the high emitters.Trade liberalizationi Trade in transportfitels. Transport fuels are inter-

Trade in vehiicles. Liberalization of vehicle trade is an national commodities. Having an open border andimportant reform, particularly in countries that have being able to take advantage of superior fuels pro-automobile manufacturing facilities. The removal of duced in other countries make it much easier to phasebarriers that hinder access to the technology avail- out gasoline lead and to implement other fuel qualitvable in the rest of the world would enable consumers improvement measures. In some parts of the worldin these countries to meet tighter emissions standards there is a move toward harmonizing fuel specifica-at least cost. Rules such as local content requirements tions and vehicle emissions standards to ensure

Env7ironmental Conicerns and Priorities in Urban Air Quiality Managemiientt 27

minimal environmental standards, foster intraregional mestically manufactured fuels with less-stringent fueltrade, and enhance the efficiency of supply Fuel speci- specifications. In one country, where the downstreamfications in North America, the EU, and the countries petroleum sector is controlled by the government to aof the former Soviet Union are already harmonized significant extent, 100 percent of the gasoline sold onfor the most part. Similar measures have been pro- the market was leaded as recently as early 2001, al-

posed in Latin America. though there are abundant supplies of unleadedThere is a tradeoff between harmonizing fuel gasoline in the region. Downstream petroleum sector

specifications and vehicle emissions standards, and reform and privatization, coupled with liberalizationsetting site-specific standards. If two neighboring of petroleum product trade and the introduction ofcountries have very different air pollution problems competition, are therefore important conditions for(as in, for example, India and Sri Lanka), harmoniz- improving fuel quality and, ultimately urban air qual-ing fuel and vehicle emissions standards would not ity.be sensible. Even within a country, provided that thedistribution system can handle segregation of differ- Greenhouse gas emissionsent fuels, cleaner (and costlier) transport fuels should Most environmental externalities from transport-ideally be used in large cities, and the use of fuels with such as those affecting human health-impose

less-stringent specifications should be confined to ar- immediate social costs and require national and localeas outside urban centers. Leakage and other action. By contrast, emissions of greenhouse gasesenforcement problems, as well as the logistics of de- (GHGs), including carbon dioxide (CO2), methane,livering fuels of different qualities to different depots, and nitrous oxide (N20), contribute to a global exter-make it difficult, however, to implement such region- nality, the impacts of which will accrue in the moreal differentiation cost-effectively. distant future.7 Solutions to this problem require con-

Countries that import the bulk of their transport certed international efforts. Policies and measuresfuels typically find it easier to harmonize with neigh- aimed at reducing or restraining GHG emissions con-boring countries than do countries that have tain elements of political and economic uncertaintydomestic refineries. Trade considerations (between or offer few rewards from a national perspective, as

Canada and the United States, within Central Amer- the December 1997 negotiations in Kyoto and, moreica, and within the EU) are a strong driving force for recently, the November 2000 Conference of the Par-harmonizing fuel and vehicle emissions standards. ties at the Hague revealed.Harmonizing standards with North America or the GHG emissions from travel and freight, whichEU with no time lag, on the other hand, is unlikely are dominated by CO2. have increased in most indus-to be cost-effective for developing countries. trial countries faster than population and, in many

Where the downstream petroleum sector is reg- cases, as rapidly as gross domestic product (GDP).ulated as regards pricing, ownership, and petroleum Indeed, in virtually all regions of the world, CO2 emis-product trade, the government necessarily becomes sions from transport are rising in relation to totalinvolved in changes in fuel quality. Many refineries emissions. Policymakers around the world arein developing countries are owned by the govern- attempting to understand and address thisment, and some of them are not operated economically phenomenon.at present. In the absence of price and trade reforms,

revamping refineries to improve fuel mix and quality Global trends in C0 2 emissionsis likely to render them even less commercially via-

ble.Undr tesecircmstnce, te goernentmay Member countries of the Organisation for Economicble. Under these circumstances, the goverrnment may CopeainndDvlmnt(E )acutfrresist requiring changes in fuel quality, or if it requires Co-opration pand D opmn COeCD)acont forchanges, it is likely to do so while maintaining im- 2by far the greatest part of world CO emissions fromport protection through restrictions or high tariffs. In energy use, but non-OECD countries, particularly ina number of developing countries, the net cost to soci- Asia and the Middle East, are responsible for most of

etyof improving fuel quality by importing superior the growth. Between 1971 and 1994, the share of world

fuels would be lower than the cost of supplying do- carbon emissions attributable to Asia grew from about

28 Urban2 Air Qunality Managemiient

10 to 23 percent, while the share attributable to OECD quarter compared with current levels, to 140 grams

countries declined from 64 to 52 percent. For most per kilometer (g/km). The agreement also required

countries, the share of emissions arising from trans- some ACEA members to make available by 2000 cars

port has increased. emitting no more than 120 g/km. Some analysts ar-

According to data from the International Ener- gue that moves toward gasoline direct-injection and

gy Agency (IEA), per capita CO2 emissions from the diesel common-rail technology could help significant-

transport sector grew strongly from 1971 to 1995, Iy in compensating for growth in vehicle numbers in

pausing, in all but a few countries, only briefly after industrial countries.

each of the two oil shocks of the 1970s. This trend, In developing countries, average engine size

which is in contrast to that for emissions from sta- tends to be smaller, so there may not be much scope

tionary sources, is in part a reflection of the forfurtherreducingvehiclesize.Fueleconomy,how-

constancy of emissions per unit of energy for trans- ever, is often low because of such factors as poor

port. If OECD countries begin to restrain their vehicle maintenance and fuel adulteration. Use of

emissions while developing countries -whose econ- gasoline with an octane number lower than that rec-

omies are growing more rapidly than those of the ommended by vehicle manufacturers-because

OECD - do not, total emissions from the developing lower-octane gasoline (for example 80 research octane

countries are forecast to overtake those from the number, RON) is available and is cheaper, or because

OECD within a fairly short time period. of adulteration of gasoline with kerosene - decreases

fuel economy, leads to knocking (and, ultimately, to

Options for reducing GHG emissions engine damage), and makes for higher emissions. IData

l'olitically, suggestions for GHG mitigation measures collected in India in November-December 1999 Lur-

in developing countries are often received warily and ing a series of inspection and maintenance "clinics"

can be perceived as a denial of these countries' basic for two-wheelers indicated that minor vehicle repairs

right to economic growth and improvement of well- improved fuel economy by an average of 17 percent

being. The keys to changing this perception are (a) to (in 210 motorcycles randomly selected from those re-

link GHG mitigation to emission-reducing policies porting to dealers for scheduled servicing) and

whose goals are of far greater immediate relevance reduced CO emissions by 44 percent (Iyer 2000).

than GHG mitigation, and (b) to facilitate financial as- The scope for improving fuel economy is partic-

sistance from industrial countries to reward ularly large in countries where gasoline octane

developing countries for the global benefits of accel- remains low. In the NIS, many vehicles run on gaso-

erating the introduction of such local measures. line with a motor octane number (MON) of 76 or even

Several measures that reduce local pollution also re- 72. Increasing the octane and the engine compression

duce GHG emissions. ratio would result in fuel savings- and reductions in

One area of overlap between local and global GHG emissions-in the long run.benefits is increasedel e m The enormous gains Another area of overlap between local and glo-ecoom.bal pollution-reduction goals is trarsec nanage eTnt.

made in improving fuel economy in the 1970s and the ga fficutongeductions iss ffic managemend

first half of the 1980s have contributed to decreasing Traffic congestion worsens emissions of both local and

both local and global pollution in industrial countries. global pollutants. It has been reported that increasing

In these countries, current and future options for im- the average speed in city traffic from 10 km/h to 20km/h can cut CO, emissions by nearly 40 percent.

pveight, direct fuel injection, lean-burn technology, It is important to recognize, however, that thereweiht,dirct uelinjctin, eanbur tehnoogy isnot always a synergy between measures to reduice

measures to increase the share of diesel (which may,

however, adversely affect local pollution), optimized local pollution and measures to mitigate GHG emis-

engine transmission systems, and hvbrid vehicles. The sions. The evaluation of mitigation measures for localEuropean Automobile Manufacturers Association pollution focuses on vehicle emissions, whereas in

(ACEA) and the European Commission reached an addressing GHG emissions, the entire fuel cycle, from

agreement in the late 1990s wherebv by 2008 average well to tailpipe, needs to be analyzed. Strategies for

CO2 emissions from new cars will be reduced by one- improving local air quality in middle- and high-in-

Environmental Concernis and Priorities in Urbant Air Quiality Managemelnt 29

come countries have focused on vehicle and fuel qual- At the global level, there are moves to address issuesity improvement, to reduce tailpipe emissions of that can be tackled only globally (GHG emissions)harmful pollutants, much more than on reducing as well as initiatives, led by vehicle manufacturers,demand for fuel. As is described in the section on to harmonize fuel quality and vehicle emissions stan-World Bank analytical work, below, locally motivat- dards worldwide. On the regional level, there areed air quality improvement programs for urban pollutants such as SO2 that require regional solutions.transport in such middle-income countries as Mex- There are also initiatives to harmonize fuel specifica-ico and Chile have been shown to have limited tions and vehicle emissions standards on a regionalcollateral benefits for reduction of GHG emissions basis, notably in the EU. In the NIS, these standards(Eskeland and Xie 1998). are already harmonized by virtue of the countries'

Diesel is a particularly efficient fuel, and hence history. In some regions, standards are increasinglyfavorable from the point of view of reducing GHG integrated on account of extensive trade. Canada,emissions. However, recent scientific findings suggest Mexico, and the United States are in this category, al-that diesel emissions are more damaging to human though with a considerable time lag in Mexico. Allhealth than emissions from other fuels. The suitabili- these trends affect decisionmaking at the nationalty of diesel for reducing emissions is therefore in level.question. The national government typically sets air qual-

The worldwide trend toward mitigating local ity standards, fuel specifications (with geographicpollution by progressively reformulating transport differentiation if the distribution infrastructure canfuels through severe hydrotreating is making refin- support it), vehicle emissions standards, and defini-ery processes increasingly energy-intensive, thus tions of what constitutes noncompliance. Airincreasing GHG emissions. This is particularly true pollution problems are location-specific, and onceof the recent moves in North America and the EU to these standards are set, particularly if there is geo-limit sulfur in gasoline and diesel to 10-50 wt ppm or graphic differentiation, it is state and municipal

even lower. governments that act to implement them. Govern-An area that merits examination is the role of ments at these levels monitor air quality, fuel and

fuel pricing in encouraging better fuel economy and lubricant quality, and vehicle emissions; integrateoptimizing fuel usage. Auto manufacturers in indus- transport considerations into overall city develop-trial countries responded to the oil crisis of the 1970s ment plans; develop traffic flow, demandby adopting measures to increase fuel economy. In management, and other strategies for mitigating traf-the United States, however, retail gasoline prices re- fic congestion and emissions; and, wheremain relatively low compared with those in the EU appropriate and fiscally possible, offer financial andcountries and Japan, and the average fuel economy other incentives to facilitate vehicle renewal, non-of new vehicles has declined so much in recent years motorized transport, and other means of mitigatingthat it is now on a par with the figures for 1980. The traffic emissions.gains in the intervening period have been offset by These considerations are important in determin-the increased popularity of sport utility vehicles. A ing the proper instruments and frameworks forsimilar pattern may exist in those developing coun- assisting client countries in their efforts to improvetries where diesel is hardly taxed, making its retail their environments and strengthen their environmen-price low. Such a pricing policy not only encourages tal policy and regulatory frameworks. The Worldexcessive use of diesel but also makes market pene- Bank, through its policy dialogue with client govern-tration by cleaner fuels (alternative fuels) difficult. ments at the national level and through sectoral

programs and projects at the urban level, can be ef-Decisionmaking levels in transport-related fective in forging cross-sectoral coordination ofair quality management policies and supporting a combination of measures

Decisions made at different levels affect policies de- that can contribute to improved environmental con-signed to combat transport emissions (see Figure 3). ditions in developing countries.

30 Urbain Air Quality Management

Figure 3. Levels of decisionmaking affecting transport-related urban air quality management

International and global environmental Regional agreements and negotiationsagreements and negotiations * Agreements on emissions of regional

* Agreements on emissions of global pollutants pollutants (SO,, NO., ozone)(CO, methane, N2 0) * Permit trading for regional pollutants

* Financial transfer mechanisms in connection with (SO2 )international/global agreements (CDM, GEF, PCF) * Regional harmonization of fuel

* Technical assistance and technology transfer specifications and vehicle emissionsmechanisms in connection with standards (EU, NIS)international/global agreements * Regional integration of fuel

* Negotiations to harmonize fuel specifications and specifications and vehicle emissionsvehicle emissions standards worldwide standards (United States-Canada-(Worldwide Fuel Charter) Mexico)

Regulations at the national level

* Air quality guidelines and standards* Air quality monitoring networks Ministry of* Vehicle emissions standards environment* Vehicle fuel efficiency standards* Enforcement mechanisms for vehicle emissions and fuel economy Ministry of

standards transport* Vehicle taxes* Vehicle import regulations Ministry of* Fuel and lubricant quality regulations and standards o energy* Enforcement mechanisms for fuel and lubricant quality standards* Fucl taxes Ministry of* Fuel import regulations finance* Financial incentive mechanisms

Regulations and decisions at the urban and municipal level

* Selection of air quality monitoring site locations, operations, and analysis of monitoring results* Vehicle registration* Vehicle inspection and maintenance programs* Fuel and lubricant quality monitoring* City planning and city development strategies* Traffic flow and traffic demand management* Public transport planning and investment* Road maintenance and segregation by use* Street cleaning and tree planting* Incentive mechanisms for use of public transport and nonmotorized transport

Note: C02. carbon dioxide; N20, nitrous oxide; NO., nitrogen oxides; SO2, sulfur dioxide; CDM, Clean Development Mechanism; EU,European Union: GEF, Global Environment Facility; NIS, newly independent states; PCF, Prototype Carbon Fund.

Chapter 2

World Bank Experience withSupport for Urban Air Quality

Management Programs

In recent years the World Bank has started to ad- methodology for estimating the health impacts of keydress urban air quality management and the in- air pollutants-particulate matter, SO2 , NO,, andterlinkages with the transport sector, primarily lead - on the basis of meta-analyses of dose-response

through analytical work, nonlending services, region- functions established in epidemiological studies car-

al initiatives, and partnerships. A coherent and ried out primarily in industrial countries. Ostro andconsistent strategy, however, does not yet exist, and others (1996, 1999) laid the groundwork for usingexamples of good practice are only starting to emerge. transferred dose-response functions for health effects.Coordination, within the Bank and in client countries, In a study in Santiago, a subset of the dose-responseamong the transport, environment, and energy functions was estimated locally, lending empiricalsectors is an essential condition for air quality man- support to the working assumption that dose-re-agement but has only now begun to develop. sponse functions can be applied to transfers from

The following sections review the Bank's ana- other cities with similar conditions (Eskeland 1997;

lytical work, its nonlending services, its urban World Bank 1994).transport portfolio, and other relevant portfolios. The The study in Jakarta examined the impact ofBank has been active in conducting analytical work, ambient concentrations of pollutants on health andproviding technical assistance, and disseminating suggested that significant benefits could result from

information and experience concerning the various reducing exposure to both outdoor and indoor airaspects of urban air quality management. Among its pollutants. The greatest estimated benefits came frommajor activities are analytical work on the assessment reducing particulate matter concentrations, but thoseof the health impacts of air pollution and the identi- from reducing exposure to lead and NO2 were alsofication of cost-effective approaches across sectors; significant (Ostro 1994).the Urban Air Quality Management Strategy (UR- Analytical resources were geared toward ob-BAIR) in Asia; lead phaseout initiatives; clean taining estimates of the benefits of pollution

.... .. . ~~reductions by employing models of health effects,transport fuel studies and initiatives; the South Asia rtwo-stroke engine initiative; and regional clean air pollutant exposure, and dispersion. In Santiago theinitiatives. cost-effectiveness of a range of pollution abatement

interventions was assessed and ranked to assist pol-

Analytical work icymakers in setting priorities. The Santiago study(Eskeland 1997) analyzed emissions standards for

In connection with its assistance to the governments buses, cars, and trucks. It broke new ground by com-of Indonesia and Chile, the World Bank developed a pleting a multipollutant cost-benefit analysis of

31

32 Urban Air Quality Managemient

emissions controls, including cost control alterna- from fuel use, while large sources contribute thetives, dispersion and exposure modeling, dose- most to climate change impacts. This implies thatresponse estimation for health effects, and valuation the overlap between measures for addressing lo-of these health effects. cal and global issues is likely to be limited.

In Mexico City a similar cost-effectiveness as- * The sectoral differentiation in fuel use is at leastsessment (Eskeland 1992) focused on pollution as significant for the environmental costs of fuelabatement measures in the transport sector. The anal- combustion as the differences in types of fossilysis evaluated and ranked in terms of fuel used.cost-effectiveness a wide range of technical measures * Marginal damage costs per ton of "local" pollut-(26, in all) for making vehicles and fuels less pollutants vary greatly across sources and locations.ing. These measures included vehicle retrofitting, They are much higher for small (low-stack or low-emissions standards and vehicle inspection pro- level) sources because of dispersion and expo-grams, fuel improvements, and alternative fuels. The sure patterns.study assigned different weights to the pollutants Diesel-powered urban vehicles and small stovesconsidered in calculating cost-effectiveness but did and boilers that burn coal, wood, or fuel oil im-not estimate the benefits of reductions in urban pol- pose the highest social costs per ton of fuel. Thelution. greatest disparities between local and global dam-

These analyses showed that the Mexico City pro- age costs are also found for these fuel uses.gram could reduce 64 percent of the locally weighted * The large range of environmental damages forair pollutant emissions from motor vehicles and that different combinations of fuels, sources, and lo-the measures identified in Santiago reduced 65 per- cations limits the efficacy of simple fuel-pricingcent of local pollution. In an attempt to determine measures and necessitates a skillful mix of policyhow urban air pollution control programs could be instruments able to send highly differentiated sig-modified to take into consideration global climate nals to various users of fuels.chlange concerns, Eskeland and Xie (1998) reexam-ined locally motivated programs for control of The methodology established by this study pro-pollution from transport in Mexico City and Santia- vides a useful tool for assessing key environmentalgo. The Mexico City program had a very small effect externalities of fuel use. Combined with an estimateon the global environment, decreasing GHG emis- of cost-effective interventions, the methodology cansions only 6.5 percent. A similar rather limited synergy guide policymakers in choosing urban air qualitywas found in Santiago, where the identified measures management interventions. In Katowice, Poland, forlowered GHG emissions only 5.3 percent. example, it was estimated that an "optimal" pollu-

Lvovsky and others (2000) estimated the social tion control strategy (consisting of the most efficientcosts, including health and nonhealth damages and combination of measures for reducing the total so-climate change impacts, associated with different cial damage caused by PM10, SO2, NOR, and CC2 ) hadtypes of fuels and a variety of sources in six devel- benefits equal to or greater than any strategy that fo-oping countries. The major qualitative findings of the cused on only one or two of these pollutants. Thisexercise indicated that: analysis helped the Bank in designing the Poland* The environmental costs of fuel use in large de- Environmental Management Project.

veloping-country cities can be so high that mar-ginal damage costs may exceed both producer Nonlending services

and retail prices for some fuel uses.* In highly polluted urban areas, local health ef- URBAIR

fects dominate the damage costs from fuel use, URBAIR was undertaken during 1992-95 under thewith global climate change impacts being much auspices of the Metropolitan Environment Improve-smaller. ment Program (MEIP), financed by the United

* Vehicles and small stoves and boilers are respon- Nations Development Programme (UNDP) and exe-sible for most of the health and overall damages cuted by the World Bank. The objective of the study

World Bank Experience wvitlh Support for Urban Air Quality Managemnent Progrants 33

was to assist in the design and implementation of Regional Program for Elimination of Lead in Gaso-policies, monitoring, and management aimed at re- line in Latin America and the Caribbean, funded bystoring air quality in Asian metropolitan areas. the joint UNDP/ World Bank Energy Sector Manage-URBAIR combined air quality analysis (air quality ment Assistance Programme (ESMAP) (World Bankdata assessment, emissions inventories, and disper- 1997b); the preparation of a pan-European strategysion modeling) with economic evaluation to phase out leaded gasoline under the leadership(calculations of health damages and of the costs of of the United Nations Economic Commission formitigation measures). In each of the four participat- Europe (UNECE) and the government of Denmark;ing cities -Jakarta, Mumbai, Kathmandu, and Metro the National Commitment Building Program to PhaseManila - locally staffed teams on air quality, econom- Out Lead from Gasoline in Azerbaijan, Kazakhstanic and health analysis, and policy met frequently to and Uzbekistan, funded by the Danish Environmen-discuss and analyze information. tal Protection Agency; the ESMAP-funded

Government and industry representatives, lo- Elimination of Lead in Gasoline in the Middle Eastcal researchers, representatives of nongovernmental and North Africa program; and most recently, a re-organizations (NGOs), and international and local gional program on lead elimination in Sub-Saharanexperts met at workshops and working group meet- Africa under the Africa Clean Air Initiative.ings in each city. Collectively, they reviewed air The Bank has also assisted individual countriesquality data and the results of modeling and econom- with introducing appropriate policies, conductingic calculations with the aim of designing action plans feasibility studies, and implementing policies. Thesethat took into account the economic costs and bene- countries include Bangladesh, Bulgaria, China, thefits of air pollution abatement measures. The analyses Dominican Republic, El Salvador, Haiti, Indonesia,that formed the basis for the selection of the action Jamaica, Malaysia, Pakistan, Romania, Sri Lanka,plans included a good balance of technical and eco- Thailand, and Vietnam. In Pakistan, where the gaso-nomic evaluations. line supply was entirely leaded at the time, the

The findings and the results of the URBAIR pro- ESMAP-funded Pakistan Clean Fuels Program exam-cess are being followed up in the World Bank's ined the cost of phasing out lead, the policy barriersMumbai Urban Transport Project, under preparation. to the introduction of clean fuels, and the role of in-In Manila the Asian Development Bank used the terfuel pricing in discouraging overuse of automotiveURBAIR Action Plan in an air quality management diesel.project. The government of China has also used the In all these activities the Bank has played theURBAIR approach in its urban transport projects. catalytic role of bringing together a wide range of

stakeholders and interested international partici-Lead phaseout pants, including representatives from the transport,

A number of risk assessment and environmental environment, and energy sectors and from industry,health studies have indicated that lead is a serious academia, and NGOs. The Bank has helped buildenvironmental health problem in urban areas in the consensus, transfer experience from other countriesdeveloping world. Recognizing that phasing out lead and regions, dispel myths about lead phaseout, andfrom gasoline is a cost-effective and technically fea- point out the need for an integrated approach so thatsible way of addressing the problem, the Bank has fuel parameters other than lead are considered whencalled for the complete phaseout of lead in gasoline refineries are upgraded to handle lead elimination.in developing countries and has undertaken a num- To ensure that refinery modernization schemesber of activities to that end. It has supported several (which may be required for phasing out lead) arehealth and feasibility studies, prepared policy pa- optimally designed, the programs have stressed thepers, made public statements, and worked with importance of addressing comprehensive fuel qual-bilateral and multilateral partners and NGOs to raise ity issues as part of lead phaseout plans.awareness and build political commitment. A common misperception that continues to be

The Bank has initiated and participated in sev- encountered, although there is no technical basis foreral regional lead phaseout initiatives, including the it, is that vehicles have to be retrofitted with catalytic


converters before lead in gasoline can be phased out. The regional study on Cleaner TransportationA more plausible (from the technical point of view) Fuels for Better Air Quality in Central Asia and thebut much exaggerated concern is that a significant Caucasus built on the National Commitment Build-fraction of the vehicle fleet will experience valve seat ing Program to Phase Out Lead from Gasoline inrecession. As noted in Box 4, above, the Bank has been Azerbaijan, Kazakhstan, and Uzbekistan. It was fund-able to refer governments to experience in other coun- ed by ESMAP and the Canadian Internationaltries with similar vehicle fleet characteristics that have Development Agency (CIDA) and was a joint effortalready eliminated lead in gasoline and that have by the Energy and Environment Departments of thefound valve seat recession to be extremely rare. This World Bank's Europe and Central Asia Region andevidence has proved valuable in persuading govern- the Environment and Oil, Gas and Chemicals depart-ments to ban lead in gasoline as soon as possible. ments of the World Bank. The program examined the

eight countries in the region: Armenia, Azerbaijan,Clean transportfuels Georgia, Kazakhstan, the Kyrgyz Republic, Tajiki-

Lead phaseout cannot be implemented in isolation; stan, Turkmenistan, and Uzbekistan. Consisting ofit raises complex technical and fuel quality issues three principal components-air quality monitoring,that have to be addressed as part of a comprehen- vehicle fleet characterization, and downstream pe-

troleum sector analysis -the study assessed thesive, cost-effective approach to air quality manage-ment. Accordingly, lead phaseout initiatives have led current status of air quality and air quality monitor-to broader programs and studies that address cost- ing systems; current and future vehicle fleet

to boade prgram andstuies hat ddrss cst- characteristics and their fuel requirements; the cur-effective ways of improving transport fuel quality in

specific countries o. in entire regions. rent status of vehicle emissions inspection programs;seificlcounetre orainentireretions. fuelconsumpt the implications of changing demand and fuel qual-Vieecateris,andthedownstics, fueltconum pction ity for the refining sector; and changes in petroleum

patterns, and the downstream petroleum sector of- sector policy such as pricing, fiscal measures, andten have many similarities in a given region. Regional liberalization of product trade to facilitate the intro-programs make it possible to explore these common duction of cleaner fuels (Kojima and others 2000).elements as part of the development of an integrated The study found that the most significant chal-

air quality management program. By setting mini- lenges to urban air quality management in themal fuel and vehicle emissions standards, which transport sector and to the refining sector in the re-individual countries can choose to exceed to meet gion are the rapid rise in diesel consumption in thetheir own air quality objectives, a regional approach coming decade, as heavy-duty vehicles switch fromnot only ensures that minimal environmental stan- gasoline to diesel, and the increased use of high-octanedards will be maintained but also significantly gasoline as gasoline vehicles with low-compression-

reduces illegal smuggling of lower-priced, poor- ratio engines are replaced by modern engine vehicles

quality fuels. By facilitating intraregional trade, a requiring high octane. The air quality monitoringregional approach also offers potential for reducing system, standardized throughout the former Sovietthe incremental cost of improving fuel quality and Union, is not capable of generating data that can bevehicle technology. compared with international air quality standards

As part of the Regional Program on the Elimi- and guidelines. The key recommendations of thenation of Lead in Gasoline in Latin America and the study were discussed and unanimously endorsed byCaribbean, the Latin America and the Caribbean government representatives and other stakeholders(LAC) Fuel Quality Improvement Program funded in the region at the final regional workshop in Octo-

by ESMAP developed-with the active participation ber 2000.of the key stakeholders in the region-gasoline, die- The Sri Lanka Clean Air/Fuels Program has ansel, and LPG specifications that can be adopted by urban air quality management component that willthe entire region for the purpose of facilitating examine vehicle maintenance, the role of fiscal poli-

intraregional trade and ensuring minimal environ- cy, fuel quality, and other matters related to transportmental protection (World Bank 1998). emissions in Colombo. The ESMAP-funded Mexico

World Bank Experience with Support for Urban Air Quality Management Prograins 35

Energy-Environment Review (World Bank 2001) and case of Bangladesh, the most commonly used lubri-

Turkey Energy-Environment Review both address cant is straight mineral oil, designed for use intransport emissions and, in particular, the quality of slow-moving stationary engines. The impact of us-

transport fuels. ing 10 percent lubricant is dramatic. In ademonstration for auto mechanics conducted under

South Asia two-stroke-engine initiafive the Dhaka Baby Taxi Auto-Clinic Program, a taxi run-

Two- and three-wheelers with two-stroke engines are ning on gasoline containing 10 percent lubricant ofa significant source of fine particulate emissions in the wrong type smoked so badly that the mechanicsAsia. In South Asia two-stroke-engine vehicles are had to walk away from the vehicle, while smoke fromextremely popular because of their low cost and make a taxi running on the proper 3 percent lubricant forup about 60 percent of the total vehicle fleet. The high two-stroke engines was hardly visible. This repre-particulate emissions levels of these vehicles are sents a rare "win-win" situation; drivers need pay

primarily attributable to the use of incorrect quanti- no more for using the correct amount of two-stroke-ties and quality of lubricant and to poor vehicle engine lubricant, smoke emissions are lower, andmaintenance. The initiative examined different mea- vehicle maintenance is improved.

sures for reducing emissions from two-stroke engines, Clean air initiativesincluding the role of lubricant dosage and quality,fuel quality, fuel type, vehicle technology, emissions The World Bank Institute (WBI) is actively involvedstandards, and fiscal and policy options. Noting the in disseminating information and strengthening lo-scarcity of data on particulate emissions from two- cal capacity in the Bank's client countries to developstroke engines, the initiative also mounted an and execute an integrated urban air quality manage-experimental program to measure mass particulate ment plan. Among the most prominent activitiesemissions as a function of vehicle age, vehicle main- undertaken by the WBI are clean air initiatives in dif-tenance, lubricant quality, lubricant quantity, and fuel ferent regions of the world. The Clean Air Initiativesquality. The findings of this initiative (Kojima, Bran- in Latin America and the Caribbean and in Sub-Sa-don, and Shah 2000) are being applied to the haran Africa were launched in 1998, and similarBangladesh Air Quality Management Learning and initiatives in East and South Asia, and in Europe andInnovation Loan (LIL), the Sri Lanka Clean Air and Central Asia are being initiated. The Clean Air Initia-Fuels Program, the ESMAP-funded Dhaka Baby Taxi tive approach provides systematic and compre-Auto-Clinics and Bangkok Motorcycle Clinics, and hensive learning opportunities to various sectors ofthe Bangkok Motorcycle Upgrade Project. civil society through such modalities as city-specific

For new vehicles, promoting a switch from two- workshops, distance learning training, network sup-stroke to four-stroke engines is one of the most port, and information and outreach activities.cost-effective mitigation options. The price differenc- In Sub-Saharan Africa the initiative has focusedes between the two engine types are small, and two- primarily on transport-related air pollution. The part-and three-wheelers with four-stroke engines have ner cities include Abidjan (C6te d'Ivoire), Cotonouhigher fuel economy and significantly lower partic- (Benin), Dakar (Senegal), Douala (Cameroon), Harareulate emissions than do their two-stroke counterparts, (Zimbabwe), Lagos (Nigeria), Nairobi (Kenya) andespecially if emissions deterioration with increasing Ouagadougou (Burkina Faso). This is a regional pro-vehicle age is taken into account. For in-use vehicles, gram jointly initiated and managed by the Urbanby far the most cost-effective mitigation option is the Mobility Component of the Sub-Saharan Africa Trans-use of the correct quantity and quality of lubricant. port Policy Program (SSATPP) and the WBI. TheAlthough vehicle manufacturers recommend only 2 initiative is built on the concept of partnership amongpercent lubricant for two-wheelers and 3 percent for development agencies, African authorities, researchthree-wheelers, some drivers of three-wheeler taxis organizations, environmental institutions, and con-add as much as 8 to 12 percent lubricant. Further- sultantsmore, all too often the lubricant they add to gasoline The initiative in Latin America and the Carib-is not intended for use in two-stroke engines; in the bean has focused on five major cities - Buenos Aires,

36 Urbain Air Quality Management

Lima-Callao, Mexico City, Rio de Janeiro, and Santi- classified as air quality components for ease of dis-

ago de Chile-with a view to developing city action aggregating the total project budget, less than I

plans and distance learning. The private sector part- percent of the total ongoing portfolios listed in An-

ners include DaimlerChrysler, Renault, Shell, and nex D can be said to directly target air pollution

Volvo. The bilateral and multilateral agencies par- abatement. For the closed projects listed in Annex C,

ticipating in the initiative include the German Agency the share increases to 27 percent because of the in-

for Technical Cooperation (GTZ), the Netherlands clusion of the Mexico Transport Air Quality

Ministry of Foreign Affairs, the Inter-American De- Management Project. If that project is omitted, the

velopment Bank, the Pan American Health share falls to less than 0.5 percent. These numbers

Organization, and the UNDP. The initiative covers should not be overinterpreted, however, on account

issues of environment, urban transport, health, ener- of the very narrow definition employed for classify-

gy, industrial pollution, and global emissions as they ing "air quality components" in the projects reviewed,

relate to air quality in the subject cities. Its three goals for the reason given above. The overall impact on

are to promote the integrated development or en- urban air qualitv of many of these projects is expect-

hancement of clean-air city action plans, with ed to be considerably higher than these percentages

participation by all relevant stakeholders; to advance would indicate.

exchange of information; and to foster public partic-

ipation and the active involvement of the private Closed projects

sector in implementing innovations in the use of low During 1980-99, 19 urban transport projects were

emission/low carbon technologies, closed (see Annex C). Of these, only one, the Mexico

City Transport Air Quality Management Project, was

designed to reduce air pollution from the transportOn account of heavy costs to human health, urban sector. It was the first Bank project to focus exclu-

air quality is a serious environmental problem that sively on supporting a comprehensive program to

affects the economic development of many countries. reduce air pollution in an urban area (Box 6).

The preceding discussion has shown that one of the Two other projects had an explicit environmen-

contributors to deteriorating urban air quality is tal component: Chile Urban Streets and Transport,

transport-related. It would therefore be informative and Sri Lanka Colombo Urban Transport. Among the

to review the Bank's urban transport portfolio to see objectives of the Chilean project were to promote in-

whether the Bank is proactively addressing this tegration of the urban transport elements and to

growing problem, over and above the "do-no-harm" reduce congestion and air pollution. About 7 percent

approach, in which the environmental implications of the total cost was set aside for identifying and eval-

of projects are considered through integrating envi- uating traffic management actions to reduce

ronmental aspects into economic analysis, preparing congestion and air pollution. This investment includ-

proper environmental assessments, and introducing ed two separate studies: identification and evaluation

measures to mitigate negative environmental im- of traffic management actions that would effectively

pacts. reduce congestion and air pollution in Santiago, and

This section presents a brief overview of air a feasibility analysis for a bikeway in the Greater San-This~ ~ ~ ~ ~ ~~~~~~ a sectia presents biewv briee ovevte buil aire

pollution management in urban transport projects- tiago Area (although bikeways were not built under

past and ongoing. In some cases there is a fair amount this project).of overlap between transport and environmental ob- The Colombo Urban Transport Project in Sri

jectives. For example, activities such as purchasing Lanka procured air quality testing equipment. Au-tomated, continuous air qualitv monitoring is

new buses to replace old fleets, replacing some bus toratled inuousrair quai

service with a rail system, and improving traffic man-

agement to reduce congestion and increase roadsafety are all likely to contribute to improving air The active portfolio

quality in the short term. When only those compo- Twenty-two urban transport projects were under su-

nents with explicit pollution control objectives are pervision in fiscal year 2000 (see Annex D). Nine

World Batik Experience with1 Su pport for Urbant Air Quiality Managemtienit Programs 37

Box 6. Improving air quality in the Mexico City Metropolitan Area through a comprehensivepollution reduction program

The Mexico City Metropolitan Area (MCMA), the most populated urban area in Latin America, has a veryserious air pollution problem. The city occupies an area of about 1,200 square kilometers and lies at anaverage altitude of 2,200 meters. Following the World Bank's first urban transport project there in 1989,the Bank decided to support a project with a comprehensive program to reduce air pollution in theMCMA. The project included measures to (a) reduce emissions of key pollutants from transport sources;(b) develop a policy framework to support both transport and air quality management objectives, includ-ing vehicle emissions standards, an improved I/M program, and regulations to phase out lead fromgasoline; (c) improve the scientific basis underpinning the development and management of the air qual-ity program; and (d) strengthen institutional capabilities to plan and implement air quality programseffectively over the long term.

During the implementation period of the project, vehicle emissions standards were revised, and the I/Msystem was modified, making it a centralized system consisting of high-volume, test-only centers. Agasoline vapor recovery program, part of the ozone control effort, was begun.

Mexico eliminated lead in gasoline in 1997. There are now 32 automatic air quality monitoring stations inMexico City, supplemented by 19 manual monitoring stations. The Metropolitan Environmental Com-mission implemented over 100 measures for air quality improvement during the project period.

Source: Authors' compilations.

projects have set aside some resources for specific Fuel. The World Bank has taken several initia-air pollution mitigation measures. The amount for tives in fuel quality improvement, typically led bymitigation measures ranges from 0.3 percent (to re- the environment and energy sectors and only rarelyview the ongoing I/M program in the Brazil Rio Mass influencing urban transport projects. Urban transportTransit Project for vehicle emissions and noise and projects may provide an opportunity to start a dia-to propose corrective measures) to 8.5 percent (for logue to support this goal. None of the active urbanconstructing a vehicle emissions and noise laborato- transport projects, except for the China Guangzhoury and developing capacity for air quality modeling City Center Transport Project, have attempted to ad-in the Brazil Sao Paulo Integrated Urban Transport dress fuel quality issues such as the phaseout of leadProject). The air quality-related activities range from from gasoline.air quality monitoring (in, for example, Buenos Aires Vehicle emissions standards. Some projects haveUrban Transport) to the design of I/M programs for financed studies to prepare action plans for address-vehicle emissions (the Belo Horizonte and Recife ing vehicular air pollution in urban areas. The ChinaMetropolitan Transport Decentralization projects). Liaoning Urban Transport Project supports improve-

The active portfolio of projects initiated between ments in the environmental sustainability of project1992 and 1999 shows no observable trend in the investments by developing and implementing aamount allocated to investment in the air quality motor vehicle emissions control strategy, which is tomitigation measures. Some recent projects, such as include the establishment of an I/M system and aBrazil Salvador Urban Transport (1999), Vietnam Ur- vehicle emissions research center.ban Transport Improvement (1998), and Turkmenistan l/M. The Brazil Rio Mass Transit Project has setUrban Transport (1997), have not allocated funds ex- aside US$0.6 million for a study to design the I/Mplicitly for air pollution purposes. Some of these program in Rio de Janeiro. Two other projects in Bra-projects, however, mention the positive urban air zil-Belo Horizonte Metropolitan Transportquality impact the project will have by improving Decentralization and Recife Metropolitan Transportbus routes, replacing the existing bus fleet, retrofit- Decentralization-have I/M components under theting the current fleet with alternative-fuel engines, environmental and safety component. The objectiveand implementing traffic management measures, is to support the review of an I/M program for vehi-


cle emissions and noise. Each project has allocated corridor as the location for the station rather than a

0.2 percent of the total project cost for the I/M com- site more representative of the exposure of the gen-ponent. eral public. This points up the importance of close

The Bangladesh Dhaka Urban Transport Project, coordination among different sectors-in this casewhich has as one of its objectives the reduction of transport, environment, and health.vehicular emissions, has allocated US$1.0 million to Pricing. Two projects in Brazil - Belo Horizonteassist in the vehicle I/M program by setting up a Metropolitan Transport Decentralization and Recifevehicle emissions laboratory. The project will use the Metropolitan Transport Decentralization-empha-results of annual roadside emissions checks on at size the need to use appropriate pricing and parkingleast 3,000 auto rickshaws (three-wheelers) and 500 policies to deter automobile growth in city centers.buses and trucks, starting in 2001, as performance The argument is that any investment in public trans-indicators. port such as a light rail system is questionable unless

The Brazil SAo Paulo Integrated Urban Trans- the growth of automobile traffic is reduced and thatport Project supports the construction of a vehicle such investment must therefore be accompanied byemissions and noise laboratory, along with hardware policies to create disincentives for the use of auto-and software, and the development of capacity for mobiles in the central business district. Similarair quality modeling at CETESB (Companhia de Tec- recommendations have been made for the Budapestnologia de Saneamento Ambiental - the Environment Urban Transport Project, where the proposal was toSanitation Agency). The expected result of this effort recommend the introduction of entry/use charges forwill be a fully operational emissions and noise labo- motor vehicles in the inner city with a dual objectiveratory and a functional I/M program in the city by of traffic restraint and generation of funds. The city2001. administration, however, has been instructed to re-

Air quality monitoring. Air quality monitoring is examine the pricing issue before implementing theimportant for obtaining information on the spatial charges because of the sensitive nature of the politi-and temporal distribution of air pollution in urban cal decision to be made in this process.areas. The Buenos Aires Urban Transport Project in- Demand management. Some projects have at-cludes a US$4.1 million component for implementing tempted to curb demand for polluting vehicles,an air quality monitoring system consisting of 13 through measures that can include an outright banfixed sites in the city of Buenos Aires. This system on such vehicles. For example, one of the agreementswill be expanded into the surrounding areas of Great- reached during the negotiation of the Dhaka Urbaner Buenos Aires under the Argentina Pollution Transport Project was that the registration of addi-Management Project. tional two-stroke-engine three-wheelers would be

The Dhaka Urban Transport Project has set aside discontinued.US$1.0 million for assisting in air quality monitor- Measures for traffic restriction have been pro-ing, which is being implemented in the Bangladesh posed in other projects as well. Under the BudapestAir Quality Management LIL. Urban Transport Project, for example, the municipal-

The sustainability and optimal design of such ity was committed to an active traffic restraintmonitoring systems is a major concern. A number of approach for the inner city and an environmentallydeveloping countries find that when (or even before) oriented traffic-calming approach for noncentraldonor funds are phased out, they cannot purchase zones.calibration gases, maintain equipment, or keep tech- Nonmotorized transport. A common theme in manynical personnel who are capable of analyzing the data. of the urban transport projects reviewed is the pro-For example, in one city, after the World Bank pur- motion of nonmotorized transport. In the Dhakachased air quality monitoring equipment, the Urban Transport Project, physical investments arecounterpart agency was not able to maintain the being made to provide facilities for NMT. The indi-equipment, and the number of monitoring stations cators used to monitor implementation are thehad to be reduced to one. At that point the counter- improvement of the NMT network, construction ofpart agency selected a heavily polluted traffic secondary road links at three locations for NMT, con-

World Banik Experienice w7itlh Snipport for Urban Air Quality Management Programs 39

struction of overpasses for NMT movement in three * One objective of the Highway Sector Project inlocations, and parking facilities for NMT on second- Croatia is to decrease road vehicle emissions byary roads. Similar efforts to promote NMT have been reducing lead in gasoline and eventually elimi-adopted in the Budapest Urban Transport Project. The nating it. The project aims to make unleaded gaso-strategy is to create a network of environmentally line widely available at a price equal to or lessfriendly zones across the entire urban area: people- than that of leaded gasoline.only streets and zones, restricted traffic zones, and * The primary objective of the Thailand Clean Fu-bicycle paths. The target under the project is to con- els and Environmental Improvement Project isstruct about 44 kilometers of bicycle paths in and to support the reduction of air pollutants attrib-around the city center. A similar NMT program in utable to petroleum fuels in Thailand.the Second Shanghai Metro Transport Project includes * One of the main objectives of the Argentina Pol-establishment of an exclusive 19.4-kilometer network lution Management Project is air quality andof nonmotorized vehicle routes in and around the noise management-setting up a network of aircentral business district. quality and noise monitoring stations and a mo-

tor vehicle emissions laboratory and certificationcenter, developing an air quality management

Dust is a serious health problem in most cities in plan for Greater Buenos Aires, and strengthen-developing countries. The paving of unimproved ing the existing vehicle I/M program. Of a totalurban roads has helped alleviate this problem to a project cost of $36.0 million, almost half ($15.1certain extent. Financial support for paving roads has million) has been set aside for this purpose.typically been included in urban development * The Bangladesh Air Quality Management LIL isprojects rather than urban transport projects. A re- devoted entirely to urban air quality manage-view of the 15 implementation completion reports ment. It has two principal components, of which(ICRs) for urban development projects filed between the first is designed to reduce vehicle emissions1990 and 1999 revealed that 5 of them included com- by revising emissions standards and enforcementponents to improve urban streets by paving unpaved and establishing pilot programs for cleaner tech-roads and, in some cases, by rehabilitating old, crum-bling, dusty roads in urban centers. Most of the nolies and evsecond de wit aicualtenvironmental benefits, however, are attributed to mntrn n vlain h rjc oueon Dhaka first and will then replicate some of thebetter traffic flow as a result of the repair of streets

activities in other cities.and sidewalks, the installation of street signs and traf-fic lights, and, in some cases, creation of bus routes. Conclusionsandrecommendations

Several other nonurban transport projects withurban air pollution components have been identified: Urban air quality management is a relatively new area* The first phase of the Peru Transport Rehabilita- of focus for the Bank. This paper has summarized

tion Project contained a major component for a some of the key technical and policy issues ofpilot NMT program in Lima. Activities included relevance to the Bank's activities in the transport-en-the construction of bicycle ways, provision of vironment-energy interface; summarized nonlendinglow-cost credit for the purchase of bicycles, pro- activities; and reviewed the urban transport portfo-vision of low-cost bicycles, and education and lio, with an emphasis on air pollution managementpublic relation campaigns. The pilot, however, activities in projects. The following conclusions canwas not replicated in the second phase. be drawn from this assessment:

* Mexico Air Quality II (under consideration) * The Bank has supported analytical work andwould be a follow-up operation to the Mexico nonlending activities that emphasize integratedCity Transport Air Quality Management Project. approaches to urban air quality management.The objective is to help establish a consistent and Linking these activities with lending specificallyintegrated transport/air quality policy frame- targeted to improving air quality, however, re-work in the Mexico City Metropolitan Area. mains a challenge.


* Several urban transport projects have adopted Properly implement environmental safeguard poli-"win-win" measures that reduce both conges- cies. In most cases, proper implementation of en-tion and air pollution, particularly through trans- vironmental safeguard policies -on the basis ofport management. In general, however, environmental assessments of projects and theinterventions designed to improve urban air by execution of environmental management plans,reducing transport emissions do not feature where appropriate-is sufficient to ensure thatstrongly in the Bank's urban transport portfolio. urban transport projects do not cause undueThe overall amount allocated specifically to air harm to people's health and the environment.quality improvement objectives is typically * Integrate environmental externalities into economicaround 1 percent of total project cost. analysis of transport strategies. The environment

Evrnetlmausiuratrnpcommunity has improved the analvtical toolspEnvirojectmenta includese inturoductin ofaiort qualand methodologies for the economic assessmentircty sonitoing andlvehile inspeduction of and muai- of environmental externalities, and such rneth-

tenance.iEprince suggestspthat the sain- odologies should be more widely used.* Focus on win-win nmeasures. Transport sector inter-

ability and optimal design of such monitoring ventions should build on the synergies betweensvstems are a major concern. In the face of wide-

- ~~~~~~~~~~~~reducing negative environmental impacts andspread corruption, lack of adequate repair and reducing negative envirnal imats and

' ~~~~~~~~~reducing other negative externalities in the trans-service facilities, and poor cultural acceptanceof regular vehicle maintenance, enforcement of I

provements in traffic and demand management,existing vehicle emissions standards remains a nonmotorized and pltans inastruc-

serious challenge. ~~~nonmotorized and public transport infrastruc-ture, and fuel efficiency.

* The responsibilitv for many environmental regu- Improve the environmental outcome of prolects. Al-

lations rests with the central government, limit- though most of the Bank's transport interven-ing what can be achieved in the framework of tions are not primarily environmentally oriented,urban projects. Most urban transport projects fo- it may be useful to think opportunistically aboutcus on local interventions such as improving traf- what can be achieved through marginal adjust-fic management, segregating nonmotorized ments to the projects for the benefit of the envi-transport routes, and strengthening local moni- ronment. The analogy is the concept of "globaltoring systems. overlays," in which local and global pollution

* Measures with explicit environmental objectives are considered together. How and where such aare not always assessed in terms of their cost- concept can be effectively utilized is an area thateffectiveness, the presence of necessary condi- should be investigated.tions (such as fuels that match certain vehicle * Develop a proactive approach to improving air qual-technologies), and linkages with policies in other ity. Although win-win measures have positivesectors such as energy. environmental benefits, improving the develop-

ment effectiveness of Bank assistance would re-Because the transport sector is primarily con- quire a proactive approach, especially in areas

cerned with improving people's lives and con- where deteriorating urban air quality causes greattributing to economic efficiency through better mo- social damage and constrains future growth.bility, better access to transport services, and Such an approach could include the identifica-increased efficiency in goods transport, the environ- tion of cities in which air quality is a serious prob-mental implications of transport policies, as well as lem; agreements with national and citytheir social and equity implications, should be an governments to work on solutions to the prob-integral part of sustainable transport strategies. On lem; strategic environmental assessments to iden-the basis of the above observations, the following tify key sources of pollution and cost-effectiverecommendations can be made for the Bank's urban sectoral interventions; and a long-term frame-transport and environment strategies. work for Bank assistance.

World Bank Experience with Support for Urban Air Quality Management Programs 41

Coordinate among sectors. The Bank should ensure ing systems have often failed in our client coun-that the policies it recommends in the transport, tries. It some cases it is recommended that onlyenergy, and environment areas are technically one or two pollutants be monitored, using thesound and internally consistent. Areas for coor- technology that the country has the technical ca-dination include setting fuel and vehicle emis- pacity to operate and maintain. Air quality moni-sions standards and improving fuel quality toring activities undertaken in urban transportmonitoring and vehicle emissions inspection. projects should, in any case, be coordinated withEven the most modern engines will pollute a great the environmental authorities and with existingdeal if the gasoline with which they are fueled is monitoring networks.adulterated with kerosene. Which fuel param- I Identification of heavily polluting vehicles and de-eters to monitor, how often, by whom, and when sign of cost-effective interventions that target them.

are issues that the Bank is only now beginning In most client countries, targeting gross pollut-to address. ers is likely to be an effective pollution reduction

* Develop strategic long-term programs. Urban air measure. Such interventions should consider aquality management involves interactions with range of options, including incentives for regu-a large number of agencies and stakeholders. In lar repair and maintenance.addition, a number of donors are increasingly * The institutional feasibility of pollution abatementactive in this area in many of the cities in which measures. While several pollution abatement mea-the Bank operates. Coordination with various sures may have promising potentials, the insti-players requires significant resources. The Bank tutional aspects of implementing such measurescould lead such efforts in selected cases when in client countries have to be considered.governments are committed, clear targets can be * The social implications of pollution abatement mea-set, and proper monitoring of efforts can be un- sures. Urban pollution disproportionately affectsdertaken. Programmatic lending instruments the poor, and improvements in living conditionscould be utilized for such efforts. therefore generally benefit them. Specific choices

and strategies for pollution abatement, however,Some specific issues need to be considered: have direct and indirect impacts on the poor that

* Reassessment of air quality monitoring activities. At- have to be assessed.tempts to introduce complex air quality monitor-

Annex A

Key Air Pollutants

Lead tative evidence that lead may adversely affect the re-In cities where leaded gasoline is still used, air- productive process in men and women (as manifested,borne lead poses a serious threat to human health. for example, in increased incidence of miscarriages),The largest body of observational studies on the although below blood lead levels of 30 g.g/dl the re-

health effects of lead documents its impact on chil- sults are conflicting. Impairment of renal function hasdren's intellectual development, typically measured been correlated with blood lead levels above 35 1ig/in terms of intelligence quotient (IQ), and on behav- dl. The effect of lead on the cardiovascular system hasioral problems. There has been much public health been studied extensively. There appears to be a weakinterest in this issue because of mounting evidence but positive association between lead in blood andthat continual exposure of children to even low levels blood pressure (WHO 1995).of lead could have a negative impact on their intelli-gence. The World Bank has repeatedly called for the Fine particulate matterelimination of lead in gasoline in recent years and has In low-income countries the vehicle emissions prob-been actively engaged in programs worldwide for lem tends to be dominated by emissions from old andphasing out leaded gasoline. poorly maintained heavy-duty vehicles that contrib-

The absorption of lead from environmental ute to high ambient concentrations of fine particulatesources is not a linear function of the amount of lead matter. Although diesel vehicles are associated withintake. It depends on the chemical and physical state both fine particulate matter and NO emissions, it isof the element and on factors such as the age, nutri- f

tional cndition and phsiologial stats of th fine particulate matter that is of concern at this stagetional condition, and physiological status of theindividual. For example, there is evidence that more of development. In Asia the particulate problem islead is absorbed when dietary calcium intake is low exacerbated by the widespread use of two-stroke-en-or in cases of iron deficiency. The amount of lead ab- gine gasoline vehicles that use excessive amounts ofsorbed by the body increases significantly when the poor-quality lubricant, which for these engines is

stomach is empty. The rate of absorption is higher for blended directly into gasoline.children than for adults. All this means that poor, In terms of health impact, PM,, and PM25 aremalnourished children are even more susceptible to much more serious than total suspended particleslead poisoning than other individuals. (TSP), which include particles of all sizes. Coarse,

Although the effect of lead on children's IQ is wind-blown particles, for example, are believed notprobably the most significant impact of using leaded to have a significant effect on health. Recent studiesgasoline, there are other health effects. There is quali- indicate that the number of particles to which the in-

43

44 Urban Air Quality Mannagemeent

dividual is exposed could be more important than tributes significantly to fine particulate emissions. Intheir mass. Particles from vehicles fall predominantly the United Kingdom road traffic sources are respon-into the submicron range, and their small average size sible for only 25 percent of PMIO but for 60 percent ofmeans that they are able to penetrate deep into the PM.., (particles smaller than 0.1 gm). Gasoline enginesrespiratory tract, especially into the alveolar regions also contribute a rather high share of the smaller par-of the lung. Animal studies indicate a potentially im- ticles. If health concerns become more focused on theportant role of ultrafine particles less than 0.05 microns smaller particles, further pressure to reduce vehicle(gim) in diameter. These particles are cleared only very emissions from gasoline engines, as well as diesels,slowly from the lung, and they can penetrate the can be expected.pulmonary interstitium, inducing inflammatory Nonexhaust particles can contribute significant-responses. ly to overall particulate emissions from the transport

A series of extensive studies, mainly in the Unit- sector. The factors affecting the total level of nonex-ed States, has demonstrated small changes in a wide haust particulate emissions include:r ange of health indicators- mortality, hospital admis- * Tires and their interaction with different road sur-sions, emergency room visits, time off school or work, facesrespiratory symptoms, exacerbation of asthma, and * Wear of brake linings on vehicleschanges in lung function- that show clear associations * The operating characteristics of vehicles, such aswith ambient particulate concentrations. Of the vari- their speed, acceleration, and loadingous health indicators, the measurement of mortality * Type of road (paved versus unpaved)has been particularly well studied. Although the com- * Ambient weather conditions (for example, tem-position of PM1 O can vary widely from area to area perature, rain, and wind).

and over time, the size of the estimated effects, espe-cially those on mortality, does not vary greatly with The US EPA gives emission factors of 0.001 andlocation (Holgate and others 1999). The actual adverse 0.008 gram of PM10 per kilometer traveled from tireimpact of fine particulate matter on public health may wear and wear of brake linings on cars, respectively.be considerably greater in developing countries than A recent emissions inventory study in the United King-existing data indicate; most studies have been carried dom indicated that tire wear and brake liningsout on urban populations in industrial countries who contributed 1 percent and 7.5 percent, respectively, ofreceive high-quality medical care and who do not total primary PMIO emissions from vehicles. The Swed-spend as much time outdoors as some segments of ish National Chemicals Inspectorate estimates that tirethe population in developing countries do. wear releases approximately 40,000 tons of polycyclic

There is a growing consensus that diesel exhaust aromatics as PM10 across Europe each year, amount-poses a cancer risk.9 This suggests that diesel partic- ing to one-fifth of current exhaust particulateulate emissions are especially harmful to public emissions from gasoline and diesel vehicles. TIhe

health -a matter for concern, since the consumption health impact of these nonexhaust particles is expect-of diesel far exceeds that of gasoline in many devel- ed to be serious because they are typically very small,oping countries. with an average aerodynamic diameter of just 1 mm

All combustion and metallurgical processes and for bitumen particles. Tires use a blend of natural rub-many other industrial operations lead to the emission ber (latex and dry sheet) and synthetic rubber. Thereof particles into the atmosphere. Particles emitted di- is, reportedly, growing evidence of a relationship be-rectly from a source are termed primary; particles that tween the incidence of asthma and the concentrationsare formed within the atmosphere, mainly from the of natural latex protein particles in the atmospherechemical oxidation of atmospheric gases, are termed resulting from the abrasion of tires and roads.secondary. The largest contributor to fine particulate Since the early days of paved highway construc-formation is incomplete combustion of fossil fuels and tion, rubber has been added to modify asphalt. Itsbiomass. Poor fuel quality, inefficient combustion pro- release into the atmosphere following abrasion bycesses, and poor vehicle and equipment maintenance vehicle tires increases the concentration of rubber par-all contribute to particulate emissions. Transport con- tides in the atmosphere. Unpaved roads create a

Annex A - Key Air Pollutants 45

different problem, the significant resuspension of road the SO2 is much more likely to come from the com-dust. bustion of coal than from the transport sector. In

It is difficult to quantify the impact of nonexhaust countries where coal is rarely used, the available dataparticles on overall ambient concentrations. In partic- suggest that ambient SO2 concentrations tend to beular, emissions factors for dust resuspension by traffic low. For example, in Pakistan, where the limit on sul-on roads are virtually absent. The US EPA's formula fur in diesel is among the highest in the world andfor calculating emissions from this source is based on where diesel consumption is several times the con-old measurements made near exceptionally dusty sumption of gasoline, measured airborne SO2 levelsroads. While these may be more typical of road con- are low. (Monitoring procedures, however, need to beditions in developing countries, more data need to be checked for quality control.)collected. This is clearly an area to which the World Nitrogen oxides (NOJ) are formed during com-Bank should pay increasing attention. bustion as nitrogen in the air reacts at high

temperatures with oxygen. The amount of NO,Carbon monoxide formed can be reduced by controlling the peak com-

Carbon monoxide (CO), a colorless, odorless gas, is a bustion temperature (for example, by recirculatingproduct of incomplete combustion of fossil fuels. In exhaust gas in vehicles), by reducing the amount ofmost cities gasoline-fueled vehicles account for the oxygen available during combustion, or by convert-bulk of CO emissions. CO inhibits the capacity of ing NOx to nitrogen and oxygen-containing inorganicblood to carry oxygen to organs and tissues. People compounds after its formation (for example, by in-with chronic heart disease may experience chest pains stalling three-way catalytic converters for gasoline

when CO levels are high. At very high levels (far in engines). Nitrogen dioxide (NO2) causes changes inexcess of the ambient CO levels typical of those from lung function in asthmatics. NOx contributes to acid

rain and secondary particulate formation and is a pre-vehicle emissions), CO impairs vision, manual dex-,rr

. ' . . ' ~~~~cursor of ground-level ozone. Both diesel- andterity, and learning ability and can cause death. The g

levet of CO emissions can be reduced by incorporat- gasoline-fueled vehicles contribute to NOx emissions.level f CO missios canbe redced b icrprt In developing countries ambient NO2 concentrations

ing oxygenates into gasoline for old vehicles and by ar oenelow cthges butrareontusing oxidation catalysts to oxidize CO to carbon di- irease.oxide. Although CO levels may exceed the guidelines mcrease.recommended by the World Health Organization Ozone(WHO) in some cities, the extent of exceedance is tvp-ically not nearly as much as that for fine particulate Ozone is responsible for photochemical smog and hasmatter, especially in countries where the consumption been associated with transient effects on the humanof gasoline is relatively low compared with that of respiratory system. Of the documented health effects,diesel. the most significant is decreased pulmonary function

in individuals taking light to heavy exercise. Photo-Oxides of sulfur and nitrogen chemically reactive VOCs and NO are two main

Sulfur oxides (SO) are products of the combustion of precursors of ozone, and gasoline-fueled vehicles aresulfur-containing fossil fuels. SO contributes to acid a significant source of VOCs. Ozone abatement is com-

x plicated by nonlinear interactions among ozonerain, which is a regional air pollution problem, and to pricated by nonlaintrctios among ozoneprecursors. In developsing countries ambient ozonethe formation of secondary particulate matter. The levels are often below the WHO guidelines but are

amount of sulfur emitted is directly proportional to rising.

the amount of sulfur in the fuel and is reduced by treat-

ing the fuel itself (for example, by hydrotreating diesel Airborne toxicsand gasoline). Sulfur dioxide (SO 2) causes changes in Toxic emissions from vehicles include benzene, poly-

lung function in asthmatics and exacerbates respira- cyclic aromatics, 1,3-butadiene (a potent carcinogen),

tory symptoms in sensitive individuals. Where and aldehydes. The WHO lists acetaldehyde, benzene,

significantly elevated levels of ambient SO2 are found, diesel exhaust, and polycyclic aromatics as carcino-


gens and provides guidelines for ambient concentra- formaldehyde and several aromatics (toluene, xylenes,tions. The WHO also provides guidelines for and ethylbenzene).

Annex B

Diesel Certification in California

Tp he importance of understanding how differ- nate diesel formulations are much less costly to pro-ent fuel compositions can meet the same duce (because they require less severe hydrotreating)vehicle emissions standards can be seen in a than the California reference.

California program that targeted NO. emissions and In 1997 the environment ministry in one coun-diesel fuel composition. California issued specifica- try proposed diesel specifications that were essentiallytions for diesel fuel that set a maximum permissible identical with the composition of the California refer-level of 500 wt ppm for sulfur and 10 percent for aro- ence fuel. Had the proposal been accepted as newmatics. In addition, the state offered an alternative diesel specifications, the cost to the country of meet-method for certifying a diesel fuel; the NO reduction ing the specific vehicle emissions standards wouldproduced by the fuel was to be the same as for a Cal- have been much greater than necessary, and in theifornia reference fuel run in a Detroit Diesel Series 60 event of a shortage of diesel, it might not have beenengine. The California reference fuel controlled many possible to import diesel with the required composi-more parameters than the specification, as shown in tion. Some policymakers in developing countriesTable B-1. Also shown in the table are four alternate appear to have the mistaken notion that, ultimately,diesel fuel formulations that are equivalent to the they should be targeting 10 percent aromatics inCalifornia reference in NO reduction. The four alter- diesel.

Table B- 1. Diesel formulations certified by the California Air Resources BoardCalifornia Chevron Arco

Diesel properties reference D4988 D4781 D-25 D-26

Maximum vol percent aromatics 10.0 15.0 19.0 21.7 24.7

Maximum wt percent polycyclic 1.4 3.6 2.2 4.6 4.0aromatics

Maximum wt ppm sulfur 500 200 54 33 42

Maximum wt ppm nitrogen 10 340 484 20 40

Minimum cetane number' 48.0 55.0 58.0 55.2 56.2a. With cetane-improvement additives.Source: California Air Resources Board < http://www.arb.ca.gov/fuels/diesel/diesel.htm >.

47

Annex C

Closed World Bank Projectsin the Urban Transport Sector

CostCountry Project (US$ millions)Brazil Sao Paulo Metro Transport Decentralization (1992) 281.0Brazil Urban Transport Rail 11 (1980) 312.8Brazil Third Urban Transport (1981) 257.0Brazil Fourth Urban Transport (1987) 468.2Chile Urban Streets and Transport (1989) 150.0China Liaoning Urban Infrastructure (1991) 126.2India Calcutta Urban Transport (1980) 121.7Indonesia Regional Cities Urban Transport (1987) 88.1Indonesia Jabotabek Urban Development (1988) 223.9Ghana Urban Transport (1993) 87.0Jamaica Kingston Urban Transport (1984) 29.7Jordan Amman Transport and Municipal Development (1983) 65.6Kazakhstan Urban Transport (1994) 42.4Korea, Rep. of Seoul Urban Transportation (1985) 204.6Korea, Rep. of Taegu Urban Transport (1988) 145.7Mexico First Urban Transport (1987) 294.9Mexico Transport Air Quality Management (1993) 1,086.7Sri Lanka Colombo Urban Transport (1993) 25.3Tunisia Second Urban Transport (1984) 82.5

Source: World Bank data.

49

Annex D

Ongoing World Bank Projectsin the Urban Transport Sector

Country Project Cost (US$ millions)

Argentina Buenos Aires Urban Transport (1997) 400.0Bangladesh Dhaka Urban Transport (1998) 234.2Brazil Sao Paulo Integrated Urban Transport (1998) 95.1Brazil Rio Transport Decentralization (1993) 272.0Brazil Rio Mass Transit (1997) 373.0Brazil Belo Horizonte Metropolitan Transport Decentralization (1995) 197.3Brazil Recife Metropolitan Transport Decentralization (1995) 203.8Brazil Salvador Urban Transport (1999) 308.0China Second Shanghai Metro Transport (1993) 657.1China Guangzhou City Center Transport (1998) 550.0China Liaoning Urban Transport (1999) 384.0Colombia Bogota Urban Transport (1996) 141.0Egypt Greater Cairo Urban Development (1988) 91.0Hungary Budapest Urban Transport (1995) 67.1Kenya Urban Transport Infrastructure (1996) 155.0Korea, Rep. of Pusan Urban Transport Management (1995) 365.4Mexico Medium-Size Cities (1993) 471.1Russian Federation Urban Transport (1995) 304.0Senegal Urban Transport Reform (TA) (1997) 8.7Turkmenistan Urban Transport (1997) 38.3Venezuela, Urban Transport (1993) 149.3

Bolivarian Rep. ofVietnam Urban Transport Improvement (1998) 47.2

Source: World Bank data.

51

Notes

1. Comparative risk assessments undertaken in de- 4. Many countries have made effective use of differ-veloping countries are summarized in Keane and entiated taxation- taxing leaded gasoline more

Cho (2000). Lead emissions from vehicles can be than unleaded gasoline -to encourage the use of

classified both as fine particulate matter and as unleaded gasoline and prevent the use of leadedairborne toxics. Because of its extreme toxicity, gasoline in cars equipped with catalytic convert-however, lead has historically been placed in a ers. In the absence of such a fiscal policy, control

category of its own in air quality guidelines. For programs need to be in place to prevent perma-example, the World Health Organization lists lead nent deactivation of catalytic converters on a large

as one of the six "classical" air pollutants, and the scale as a result of misfueling. The effectiveness ofU.S. Environmental Protection Agency lists it as differentiated taxation depends on the extent to

which fuel quality standards -in this case, forleaded versus unleaded gasoline - are enforced.

2. Ozone-precursor VOCs include aldehydes, olefins, 5. The main motive for reducing sulfur in diesel isand aromatics with two or more alkyl groups. 5.Temimovefredcnsuurndeels

usually to reduce the secondary formation of sul-

fate-based fine particulate matter (see point 3).3. The study by Eskeland and Devarajan found a

fairly high estimate for the price elasticity of gaso- 6. As long as price incentives persist, the success ofline. Many other country studies have found a mmeasures to prevent diversion and adulterationrather lower value, which, if accurate, would im-' ' ~~~~~~~may be limited. For example, Thailand saw Sig-ply lower savings in Mexico. The Eskeland- nificant adulteration of gasoline and, to a lesserDevarajan study did not test for stationarity or extent, diesel with kerosene in the early 1980s,cointegration of the time series, the presence of when kerosene was heavily subsidized. To preventwhich can lead to substantial bias in parameter adulteration, the government tried a number ofestimates where there are trends in all data series, methods, which met with varying success: dyingnor was it based on an error-correction mechanism, kerosene blue, limiting the sale of kerosene to 20-which is the standard approach for dealing with liter containers, and mounting intensified policesuch problems. Further studies are needed to con- crackdowns on adulteration. Kerosene consump-firm the magnitude of the price elasticities and tion fell, but it was not until interfuel prices werehence of the savings implicit in the policy recom- adjusted, between 1986 and 1991, that the practicemended. of widespread adulteration with kerosene ceased.

53


(The police could be bribed, and the dye could be 9. The advisory board to the U.S. National Toxicol-removed from kerosene.) ogy Program has recommended that diesel

exhaust particles be listed as "reasonably antici-7. Recent measurement results have shown that N2 0 pated to be a human carcinogen." The California

emissions from three-way catalysts are substan- Air Resources Board (CARB) has officially recog-tially higher after 15,000 km-25,000 km than emis- nized that some elements of emissions from dieselsions from new catalysts. Tests on comparable engines are carcinogens. Japanese scientists claimmodels show that aged catalysts emit roughly from that they have found 3-nitrobenzanthrone to beone-third more to almost five times the rate of new one of the most carcinogenic substances ever dis-catalysts. covered; emissions of 3-nitrobenzanthrone increase

markedly when a diesel engine is operating un-8. For example, the removal of decorative "crowns" der high load.

from heavy-duty trucks in Pakistan is estimated toincrease fuel economy by as much as 20 percent.

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