The lockdown air-freshener?

The Covid-19 pandemic has cleared the city streets. But who foresaw that it would dramatically clean the urban air?

One unexpected consequence of the global response to the coronavirus pandemic has been the extraordinary reduction in urban air pollution in cities where the majority of the population have been required to stay home. This level of clean city air—clean enough to breathe freely without fear of eventually  damaging one’s health and that of one’s children, is unprecedented in the modern era. Urban residents have marveled at the clarity of distant mountains rarely seen or imagined. Cities that used to be shrouded in a grey-brown blanket of smog, now seem newly minted against a background of sparkling blue sky.

London in 2016. Parents were warned not to take their children into the city

Urban air pollution in major cities has been a scandal for centuries. The air pollution in London, England, has been atrocious since the 17th Century when the poet Sir William Davenport complained about the ‘canopy of smoke’ that covered the city.  We might have imagined that London’s air quality had improved over the last three centuries as the burning of coal in the city has been replaced by cleaner fuels, but we would be wrong. A report released in 2017 found that all Londoners are exposed to concentrations of particulate matter higher than WHO air quality guidelines. In central London, about 8 million people breathe in air that exceeds the guidelines by a whopping 50 percent or more.

The last ICE age

Coal is no longer the primary culprit. It is now the unbridled use of the internal combustion engine (ICE) for urban transport and the combustion of huge quantities of hydrocarbon fuels such as gasoline and diesel in the urban environment.  

Shanghai, before the lockdown

Poor air quality in urban areas has major health impacts, causing or exacerbating a variety of respiratory diseases as well as being implicated in lung cancer, stroke, coronary heart disease, and even driving up infant mortality.  This burden of disease imposes substantial costs on health facilities and government expenditures for healthcare.  And yet we know how to solve this problem. Why isn’t improving urban air quality an absolute priority for regional and national governments?

Sales of electric vehicles (EVs) are climbing exponentially. In 2019, the registration of electric vehicles including hybrids in the European Union (EU) and EFTA countries increased by 58%. The Netherlands has now surpassed Norway as the market leader for battery electric vehicles while Germany overtook the United Kingdom as the largest market for plug-in hybrid vehicles in Europe. In Canada, the rise has been even more spectacular: sales rose by 125% from 2017 to 2018 and continued to rise through the last quarter of 2019.

However, EV numbers remain a small percentage of total sales both in Europe and North America. The number of electric vehicles on the road is slowly increasing, but government policies that promote EVs are the key to a more rapid penetration of the market.

The popular Tesla Model 3

Although the life cycle cost of EVs are lower than conventional vehicles, their upfront costs are higher. This financial impediment is characteristic of many clean energy systems, and it underscores the need for intelligent government policies that enable people to more easily transition to technologies than have a  much lower environmental impact. Electric and other zero emission vehicles are just one example. Another is switching from natural gas to zero emission technologies like heat pumps to heat or cool buildings. In both cases, innovative financial mechanisms are required in order to defray the high initial costs of the clean energy technology.

This is not rocket science.  For home retrofits that improve thermal efficiency and the installation of geo-exchange technologies, loan schemes like the Home Energy Loan Program (HELP) in Toronto, and the Property Assessed Clean Energy (PACE) model in the US are essential. In Canada, the federal government and several provinces provide rebates that reduce EV costs to a level comparable with ICE vehicles. 

Subsidizing EVs is usually justified by emphasising the reduction in greenhouse gas emissions in the context of a country’s commitments to the Paris Agreement.  But the pandemic has opened our eyes (literally) to a huge co-benefit: clean urban air and a substantial reduction in the social and economic costs of respiratory disease caused by urban air pollution. 

Costs and co-benefits

Could the benefits of clean urban air compensate for the subsidies provided for electric vehicles? A quick review of the numbers suggests that they certainly could. In 2005, the Ontario Medical Association estimated that air pollution  from ground level ozone and particulate matter cost Toronto’s economy around $2.5 billion a year from illness, lost productivity, and economic damages including premature mortality. Most of this pollution comes from the city’s gasoline and diesel- engine vehicles.

Assuming that Toronto now has about 1.5 million conventional ICE vehicles, the social and economic cost attributable to a single ICE vehicle on the city’s streets is over $1600 a year. Switching to an electric vehicle with no emissions therefore has a net economic benefit over a five year period of roughly $8000.

The cost of operating an electric vehicle is about half the cost of running a car or SUV burning gasoline or diesel. Over a five-year period, the owner of a new electric vehicle should enjoy savings of at least $9000 compared to a conventional vehicle. If the subsidy is restructured as a loan, a car owner who has benefited from the program might reasonably be expected to repay part or all of the loan at a rate calibrated to be less than his or her annual savings—just like the HELP and PACE programs which are designed in the same way.   For example, If the car owner reimburses the EV loan program two thirds of his or her savings over a 5-year period, the government would receive $6000 in direct payments–and the car owner still comes out ahead.   

The precision of the numbers are less important than the implications for policy.  There is a clear economic case for designing and implementing a program that provides loans that enable drivers of conventional vehicles to switch to a new electric car. The economic co-benefits that accrue to municipal and regional governments are huge: clean urban air, lower levels of respiratory disease and other associated morbidity, and substantially lower greenhouse gas emissions.  


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One thought on “The lockdown air-freshener?

  • 05/13/2020 at 11:01 am

    The social cost of $1600 per ICE car per year seems high. But we need to remember that this figure is specifically for the urban environment where the social cost of carbon will be much higher than an overrall mean figure of anywhere from $50 to $200 per tonne of carbon. So it is justifiable to use a figure which reflects the much greater impact of operating a vehicle in an urban environment. In any event, this figure is based on estimates of social and economic cost from the Ontario Medical Association–which is a reliable source (and now an underestimate since the analysis dates from 2005). The takeaway here is that subsidies for EVs are absolutely justified. A loan mechansim is also an option but perhaps more difficult to manage, although it could be more acceptable to fiscal conservatives who see every subsidy as economic perfidy even though the oil and gas industry is subsidized to the tune of hundreds of millions of dollars each year, and where there are absolutely no co-benefits. Quite the opposite.


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