Reducing air pollution from urban passenger transport : a framework for policy analysis

This paper develops a simple framework to analyze various pollution control strategies that have been used or are proposed in the urban passenger transport sector. The context is the declining quality of air in urban areas, which is among the serious problems associated with the rapid motorization of societies the world over. The paper examines the point of impact of different policy levers and provides a categorization of different instruments that should assist policy makers when choosing between them. A distinguishing feature of this framework is its explicit recognition of behavioral incentives, in particular, the fact that offsetting changes in consumer behavior can often undermine the original intent of particular policies. The paper is organized as follows. Section II presents the basic framework we have used to examine transport emissions. Section III reviews pollutant characteristics and their impact. The resulting policy choices are discussed in more detail in section IV. Several urban transport projects supported by the World Bank are then reviewed in section VI, and section V concludes the report.Montreal Protocol,Environmental Economics&Policies,Air Quality&Clean Air,Roads&Highways,Public Health Promotion,Roads&Highways,Urban Transport,Transport and Environment,Environmental Economics&Policies,Airports and Air Services

Informal regulation of industrial pollution in developing countries : evidence from Indonesia

The authors test a model of supply-demand relations in an implicit market for environmental services when formal regulation is absent. They use plant-level data from Indonesia for 1989-90, before the advent of nationwide environmental regulation. Treating pollution as a derived demand for environmental services, their model relates emissions of biological oxygen demand to the price (expected cost) of pollution; to prices of other inputs (labor,energy, materials); and to enterprise characteristics that may affect pollution demand, including scale, vintage ownership, and efficiency. The price of pollution is determined by the intersection of plant-level demand and a local environmental supply function, enforced by community pressure or informal regulation. Environmental supply is affected by community income, education, the size of the exposed population, the local economic importance of the plant, and its visibility as a polluter. Their results are strongly consistent with the existence of an informal"pollution equilibrium."Pollution intensity declines with increase in plant size, efficiency, and local materials prices. Older plants and publicly owned facilities are more pollution intensive; multinational ownership has no independent effect. The results also suggest that the price of pollution is higher when plants are particularly visible and is far lower in poorer, less-educated communities. Thus the intensity of pollution is far higher in such communities. While it would be premature to generalize from these results, they suggest that the model of optimal pollution control in environmental economics is more relevant for developing countries than many have believed. Community-factory interactions seem to reflect environmental supply-demand considerations even when formal regulation does not exist. In addition, the apparent power of informal regulation implies that cost-effective formal systems should be designed to complement, not supplant, community control. In particular: 1) Local communities should not be forced to rely so heavily on visibility when judging environmental performance. Formal regulation should include publication of audited emissions reports from factories; 2) Environmental injustice may be real and important. Many poor, uneducated communities may need extra support from national regulators.; and 3) However, appropriate regulation should strike the right balance between equity and efficiency. Uniform national standards go too far because they eliminate all the natural and legitimate regional diversity that is also reflected in informal arrangements.Public Health Promotion,Environmental Economics&Policies,Water and Industry,Sanitation and Sewerage,Water Conservation,Environmental Economics&Policies,Water and Industry,TF030632-DANISH CTF - FY05 (DAC PART COUNTRIES GNP PER CAPITA BELOW USD 2,500/AL,Sanitation and Sewerage,Urban Services to the Poor

Inspections and emissions in India : puzzling survey evidence about industrial pollution

Industrial plants face pressure to abate water pollution from many sources, national and local, through formal government regulation and through more informal pressure from consumer groups and concern for the firm's reputation. Formal regulation tends to reflect the bargaining power of local communities and is not as uniform or blind as the law would imply. Regulators are not immune to the pulls and pushes of powerful community interests. Studies of enforcement in the U.S. steel industry, for example, find that it is weaker at plants that are major employers in the local labor market. Using survey data from India, the authors examine whether themonitoring and enforcement efforts of provincial pollution control authorities are affected by local community characteristics (which serve as proxies for political power). They also test for evidence that informal pressure on plants results in negotiated reductions in emissions. They find that high levels of pollution in India elicit a formal regulatory response: inspections. But inspections are ineffective in bringing about changes in behavior, probably because of bureaucratic or other problems in follow-through. Moreover, poorly-paid inspectors with low morale may be susceptible to"rent-seeking."They find little evidence to support the hypothesis that better-educated and higher-income communities are better able to pressure plants to reduce emissions than are poorer communities, although there are significantly more inspections in more developed districts. In India, whatever community pressure exists is probably channeled through formal regulatory mechanisms. Larger plants in India, as in the rest of the world, tend to be"cleaner"than smaller plants. Indian policymakers and regulators may want to explicitly recognize the tradeoff in environmental quality of the existing regulatory bias toward the small- and medium-scale sector.Sanitation and Sewerage,Environmental Economics&Policies,Water and Industry,Water Conservation,Public Health Promotion,Water Conservation,Environmental Economics&Policies,Water and Industry,Sanitation and Sewerage,TF030632-DANISH CTF - FY05 (DAC PART COUNTRIES GNP PER CAPITA BELOW USD 2,500/AL

Does environmental regulation matter? Determinants of the location of new manufacturing plants in India in 1994

The cost of complying with environmental regulations has been cited as a major burden on businesses. Is it enough of a burden to influence where businesses locate new plants, which are not restricted to their choice of location? The authors examine a unique establishment level dataset to find out whether the stringency of environmental regulation affects where firms locate new plants. Using a conditional logit model, they estimate the importance of difference variables in plant location choice. After controlling for the impact of factor price differentials, infrastructure and agglomeration, they find that the number of new plans commissioned in different states of India in 1994 does not appear to be adversely affected by more stringent environmental enforcement at the state level. In other words, and environmental"race to the bottom"is unlikely. They find that the level of existing business activity overwhelms all other factors affecting location decision. Reliable infrastructure and factors of production are also critical.Environmental Economics&Policies,Public Sector Economics&Finance,Economic Theory&Research,Labor Policies,Decentralization,Environmental Economics&Policies,National Governance,Economic Theory&Research,Health Economics&Finance,Public Sector Economics&Finance

Formal and informal regulation of industrial pollution : comparative evidence from Indonesia and the United States

The authors start from the premise that governments act as agents of the public in regulating pollution, using the instruments at their disposal. But when formal regulatory mechanisms are absent or ineffective, communities will seek other means of translating their preferences into reality. Recent empirical work suggests the widespread existence of such informal regulation: communities are often ableto negotiate with or otherwise informally pressure polluting plants in their vicinity to clean up. Their thesis is that such informal regulation is likely wherever formal regulation leaves a gap between actual and locally preferred environmental quality. They use plant-level data from Indonesia and the United States -two countries that are very different, both socio-economically and in terms of pollution regulation- to test a model of equilibrium pollution under informal regulation. Their results suggest three common elements across countries and pollutants: abatement is generally subject to significant scale economies; within-country variations in labor and energy prices have little impact on pollution intensity; community incomes have a powerful negative association with pollution intensity. Their findings on community income are especially important, as they suggest a powerful role for informal regulation whether or not formal regulation is in place. The impact of income disparity on inter-county differences in U.S. pollution intensities seems to match the impact in Indonesia. Undoubtedly, this reflects differences in both preference for environmental quality and ability to bring pressure on polluting factories. The fact that such disparities exist in the United States, even for traditionally regulated pollutants, shows that U.S. regulation has not been able to ensure uniform environmental quality for all citizens regardless of income class.Water and Industry,Environmental Economics&Policies,Sanitation and Sewerage,Public Health Promotion,Water Conservation,Energy and Environment,Environmental Economics&Policies,Water and Industry,TF030632-DANISH CTF - FY05 (DAC PART COUNTRIES GNP PER CAPITA BELOW USD 2,500/AL,Sanitation and Sewerage

Regulation and private sector investment in infrastructure: Evidence from Latin America

private sector investment in infrastructure, using recently compiled data on private and public sector investment in the water, power, telecommunications, railroads and roads sectors between 1980 and 1998 in nine large countries in Latin America. We find that the most significant institutional determinant of private investment volumes is the passage of legislation liberalizing the investment regime. This is important because it indicates that the legal basis for reform is probably more critical in determining the quality of the investment climate than specific aspects of the institutional framework governing private sector participation. In accordance with intuition, our results indicate that government action to increase regulatory certainty and minimize the perceived risk of expropriation through the establishment of independent regulatory bodies is a critical determinant of the volume of private investment flows. We also find that the general relationship of private to public investment is one of substitutability. I

REDUCING AIR POLLUTION FROM URBAN PASSENGER TRANSPORT A FRAMEWORK FOR POLICY ANALYSIS by

We thank Zmarak Shalizi and Gunther Schramm for very useful comments. We also thank Roula Yazigi for excellent assistance. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the World Bank, its Executive Directors, or the countries they represent. The paper should not be cited without the permission of the This paper develops a simple framework to analyze various pollution control strategies that have been used or are proposed in the urban passenger transport sector. The context is the declining quality of air in urban areas, which is among the serious problems associated with the rapid motorization of societies the world over. 1 The paper examines the point of impact of different policy levers and provides a categorization o

Reducing Air Pollution from Urban Passenger Transport: A Framework for Policy Analysis

Air quality is declining in urban areas, in part because of the rapid motorization of societies world-wide. To combat the problem, various pollution control strategies have been used or proposed for urban passenger transport. This paper develops a simple framework to analyse the impact of these strategies. The paper examines the point of impact of different policy levers and categorizes different instruments in a way that should help policy makers choose between them. The framework explicitly recognizes behavioural incentives, especially the fact that offsetting changes in consumer behaviour can often undermine the original intent of particular policies. The paper concludes that policies aimed at improving transport efficiency often improve air quality at the same time. However, supply side policies to relieve traffic congestion can conflict with the objective of controlling air pollution. It is hence vital that policy makers are aware of the incentives created by different interventions and weigh the impact of these incentives on subsidiary objectives before adoption of particular policies.