The impacts of fuel price policies on air pollution: case study of Tehran.

Abstract

This study aims to investigate the impacts of fuel price policies on the concentration of air pollutants in Tehran city. Autoregressive distributed lag (ARDL) estimation models were used to investigate the impacts of gasoline and diesel prices along with the weather and economic variables on the following traffic-related pollutants: carbon monoxide (CO), nitrogen dioxide (NO2), and particular matter 10 micrometers or less (PM10). In the short term, a 1% increase in gasoline prices leads to a 0.02 and 0.012% decrease in the concentration of CO and PM10, respectively. In addition, in the short term, a 1% increase in diesel prices leads to a 0.008, 0.02, and 0.015 % decrease in the concentration of CO, PM10, and NO2, respectively. Results demonstrate that a 1% increase in gasoline prices leads to a 0.011 and 0.02 % increase in NO2 concentration in the short term and long term, respectively. Fuel prices had a greater impact on air pollutant concentration in the long term than in the short term. In the long term, a 1% increase in diesel prices leads to a 0.011, 0.024, and 0.029 % decrease in the concentration of CO, NO2, and PM10, respectively. Although fuel price increases lead to a significant reduction in PM10 and CO concentrations, other factors related to weather conditions (wind speed, temperature, and rainfall) as well as economic activities have a greater impact on air pollution. Therefore, other policies such as improving fuel quality and technology along with other economic policies can be more effective.