Abstract
Based on the panel data of 306 cities in China from 2002 to 2012, this paper investigates China’s road transport fuel (i.e., gasoline and diesel) demand system by using the Almost Ideal Demand System (AIDS) and the Quadratic AIDS (QUAIDS) models. The results indicate that own-price elasticities for different vehicle categories range from to (by AIDS) and from to (by QUAIDS). Then, this study estimates the air pollution emissions (, and ) and public health damages from the road transport sector under different oil price shocks. Compared to the base year 2012, results show that a fuel price rise of 30% can avoid 1,147,270 tonnes of pollution emissions; besides, premature deaths and economic losses decrease by 16,149 cases and 13,817.953 million RMB yuan respectively; while based on the non-linear health effect model, the premature deaths and total economic losses decrease by 15,534 and 13,291.4 million RMB yuan respectively. Our study combines the fuel demand and health evaluation models and is the first attempt to address how oil price changes influence public health through the fuel demand system in China. Given its serious air pollution emission and substantial health damages, this paper provides important insights for policy makers in terms of persistent increasing in fuel consumption and the associated health and economic losses.
Highlights
In recent years, China’s rapid economic growth has correlated with huge energy consumption, especially for the road transport sector (for example, in recent years, China’s road transport sector has had enormous growth in the road transport infrastructure investment, road mileage, the stock of vehicles, freight and passenger traffic volumes, etc.)
The health damages caused by the joint effects of different air pollutants are very complicated, on which there is no consensus and solid methods to deal with this issue; for simplicity, these effects are ignored in this study. i The estimation of air pollution emissions is based on the fuel demand system estimated by the Almost Ideal Demand System (AIDS) model. j The estimation of air pollution emissions is based on fuel demand system estimated by the Quadratic AIDS (QUAIDS) model. k Results are based on the linear health effect model (see Equation (14)). l Results are based on the non-linear health effect models (see Equations (15)–(17))
China’s rapid economic growth and huge energy consumption resulted in serious air pollution emissions, which caused substantial losses to public health
Summary
China’s rapid economic growth has correlated with huge energy consumption, especially for the road transport sector (for example, in recent years, China’s road transport sector has had enormous growth in the road transport infrastructure investment (see Figure 1), road (and highway) mileage (see Figure 1), the stock of vehicles (see Figure 2), freight and passenger traffic volumes (see Figure 3), etc.). Guo et al [13] estimate that the total economic costs of health impacts due to air pollution contributed from transport in Beijing during 2004 to 2008 was 272, 297, 310, 323, 298 million U.S dollars (mean values), respectively, which accounted for 0.52%, 0.57%, 0.60%, 0.62% and 0.58% of annual local GDP. From August 2014, as international crude oil price fell sharply from $100 per barrel to around $50 per barrel in February 2015, nearly a 50 percent decline (source: U.S Energy Information Administration (EIA), http://www.eia.gov), China’s gasoline and diesel retail prices appeared as a rare “thirteen losing streak”.
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