Costs and benefits of motor vehicle emission control programs in China

Published: 2015.06.29

Zhenying Shao and David Vance Wagner

China has made tremendous progress in emission control for on-road vehicles (light-duty vehicles, buses, and heavy-duty trucks) in recent decades. The vehicle population in China grew nearly sevenfold, from 16 million to 108 million, between 2000 and 2012, and this rapid pace will continue for the foreseeable future. Although the burgeoning vehicle market brings enormous environmental pressures, China has responded forcefully to mitigate the effects of adding these vehicles to its roads and highways. In less than 15 years, vehicle emission control standards in China have advanced to China 4/IV (equivalent to Euro 4/IV in the European Union), and fuel quality standards have been tightened to 50 parts per million (ppm) maximum sulfur content. Despite these accomplishments, air quality remains poor throughout the country. More must be done in all sectors to lower pollutant emissions.

This paper reviews China’s efforts to rein in air pollution from vehicles and presents a cost-benefit analysis of the introduction of stringent new vehicle emissions and fuel quality standards. The analysis estimates future emissions, health and climate impacts, and costs according to different policy pathways. Key regions—the so-called Jing-Jin-Ji (agglomeration surrounding the capital, Beijing, the city of Tianjin, and Hebei province), the Yangtze River delta, and the Pearl River delta—are expected to lead this process.

The results show that the implementation of China 6/VI emission standards and ultra-low-sulfur fuel standards in China would yield emissions reductions from the motor vehicle fleet in both the near and the long term. These emissions reductions would lead to corresponding improvements in public health from reduced exposure to pollution, as well as reductions in climate pollutant emissions. Neither China 4/IV nor the somewhat more stringent China 5/V standards (which are in effect only in Beijing and Shanghai at this time) would suffice to prevent an increase of emissions and the incidence of premature mortality caused by the dramatic rise in the motor vehicle population. Only with the introduction of the stringent China 6/VI standards nationwide would emissions from motor vehicles continue to decline through 2030. In addition, adopting China 6/VI as early as the 10 ppm sulfur fuel is available would yield additional benefits in emission reduction. Beyond the tightening of standards, instituting a vehicle replacement (or “scrappage”) program for vehicles unable to meet the China 6/VI emission rules could speed up emission reductions in the near term.

Moreover, analysis demonstrate that benefits could be maximized if China 6/VI were implemented in sync with the announced timeline for the introduction of 10 ppm sulfur fuel. By adopting China 6/VI early, in 2018 across the country, additional emission reduction benefits would be realized, and these would continue well beyond 2030. By 2045, a conservative estimate of the annual benefits of the China 6/VI standards indicates that they would outweigh the corresponding costs by a factor of 5.5 to 1.

Chart: Annual discounted benefits and costs, 2015-2045