Right policy tools can help restore air quality

The air quality of Delhi is not only the worst among major cities of the world, but keeps getting worse. This is rightfully causing alarm and panic.We have the highest death rate in the world from chronic respiratory diseases and asthma. Delhi’s poor air quality is estimated to be irreversibly damaging the lungs and brains of a large percentage of children.

Experts agree that emissions from automobiles and burning of rice crop residue are the two major causes of particulate matter (PM) in the air being many times above acceptable levels. However, the real challenge is to formulate a coherent response to bring down PM levels within permissible limits in a few years. Zeroing in on policy instruments which deliver sustainable results without imposing undue hardship will be the key to success. Knee jerk responses – odd even, closing schools on bad days and prohibiting the use of diesel generating sets – are no substitute for effective measures to qualitatively transform the situation.

Vehicular emissions are the major cause of air pollution round the year. The key transformation is already under way, with ongoing investments to ensure supply of perol and diesel conforming to BS VI standards by 2020. Delhi is now trying to get this even earlier. These are on a par with current European standards. However, for pollution from vehicles on our roads to actually come down to European levels, something would need to be done about the existing fleet of older vehicles, as there would be vehicles whose emissions would remain too high even with BS VI quality fuel. Without addressing this issue, there would be no real short-run benefit. Mandatory scrapping of vehicles above a certain age sounds attractive but would impose undue hardship and such shock therapy usually generates a backlash.

Providing a fiscal incentive for trading in old vehicles for a new one would work better. The exemption of all taxes on the new vehicle being purchased after trading in the old one would be an attractive enough incentive. The Government would actually forego revenue only on the additional sales that would take place as result. There would be no budgetary outgo. Government should be able to take this decision to mitigate the health crisis. Dealers should be required to take the old vehicles in exchange. Auto companies may be mandated to set up a network of yards where old vehicles would be actually scrapped with proper accountability. If after a couple of years of the incentive being in place, scrapping is made mandatory, it would have greater acceptability and would complete the phasing out of all highly polluting vehicles.

Electric vehicles, or EVs, do not pollute the air on the road. The world is moving swiftly towards large-scale use of EVs. London and many other cities are considering mandating that from a future date, all new vehicles would have to be electric. Our own Energy Efficiency Services Limited (EESL) of the Union Ministry of power has done commendable pioneering work with the first round of bulk procurement of electric cars. These will be leased for use by government. The prices discovered are quite attractive and their use does not seem to need subsidies. Delhi could, therefore, decide that from next year, all new permits for public transport, buses, taxis, and three wheelers would have to be for EVs only. It could at the same time set up public charging stations. Electricity supplied at reasonable enough rates from these stations may be adequate for making the costs per passenger kilometer comparable to those of conventional vehicles.

Further, a system of leasing these electric vehicles by either auto companies, or an aggregator like EESL, would make the transition smoother; it would take care of the high risk perceptions regarding electric vehicles, which have been inhibiting private purchases. After the system of charging stations and maintenance has settled down, replacement of all existing public transport vehicles by EVs within a few years could be targeted.

The burning of crop residue from cultivation of rice in rural northern India creates an acute crisis every year. Appealing to farmers not to burn the stubble will not work; nor will a ban on burning. However, if a sufficiently remunerative price for the crop residue is offered, farmers would find it worth their while to incur the additional cost of pulling out the waste and selling it instead of burning it. The collected crop residue can then be used for generating electricity. As is being talked about, thermal power stations may be mandated to burn the collected crop residue along with coal.

Electricity from the residue would be costlier than electricity from coal. This additional cost could be made a pass through in the tariff through a suitable policy directive. This expensive electricity should be treated on a par with the other sources of renewable energy for meeting the renewable energy purchase obligations of distribution companies. Thermal power stations would then not be put at a loss for using crop residue as a fuel for generating electricity. This has the advantage of not requiring any budgetary support either from the state or the central government. The impact on consumers tariff should be marginal and bearable.

With the new quality of fuel, phasing out of older vehicles, use of electric vehicles for public transport and purchase of the entire rice crop residue for generating electricity, we should, in a few years, again be able to breather fresh air in our cities without worrying about our health.