Just one more diesel car?

As the debate over local air quality intensifies in Delhi, the Supreme Court of India is considering whether to continue the restriction on sale of diesel cars with engines larger than two liters in the national capital region (NCR), or to allow the sale of diesel cars, but impose a 30 percent environmental compensation charge (ECC) on them. The ECC is predicated on the idea that the polluting vehicle should pay to compensate for the pollution they are causing. Therefore, the question we asked ourselves was whether the environmental and public health impacts of diesel cars are severe enough for the Supreme Court to justify imposing a larger environmental compensation charge.
One way to answer this question is to estimate the effect of substituting the sale of one model year 2015 one gasoline car or SUV with a diesel passenger car or SUV. The current Bharat Stage IV emission standard (BS IV), applicable in Delhi since 2010 and nationwide beginning in April 2017, sets lax requirements for diesel vehicles relative to gasoline vehicles. The particulate matter (PM) emissions from a BS IV diesel car can be as high as 0.025 g/km even under laboratory settings, whereas the Automobile Research Association of India (ARAI) had determined a PM emission factor for even a BS II (a much earlier and weaker vehicle emission standard) gasoline car to be as low as 0.002g/km.
With an average 20-year useful life (and on average about 208,000 kilometers driven) in India, one additional BS IV diesel vehicle adds 9.6 (passenger car) to 11 (SUV) kilograms of PM emissions in India, by our estimate. But an equivalent gasoline vehicle emits less than 1 kilogram of PM through its entire lifetime. 
The public health impact of these additional PM emissions is felt mainly through an increase in premature mortality. We estimate that the addition of 10,000 new diesel vehicles in Delhi would cause at least an additional 25 premature deaths, and possibly as many as 52 (if all 10,000 were cars) to 61 (if all 10,000 were SUVs). This is a conservative estimate, as it only addresses increase in premature deaths due to higher incidence of adult cardiopulmonary diseases, adult lung cancer, and child respiratory infections. Morbidity effects, and effects of pollutants other than direct PM2.5 emissions, will further worsen the impact.
The economic benefit of preventing these premature mortalities would range from Rs. 3.3 Lakh on the lower end to possibly as much as 6.9 Lakh per diesel car and Rs 8.1 Lakh per diesel SUV, using a Value of Statistical Life (VSL) approach. An environmental compensation charge (ECC) on diesel vehicles equivalent to these amounts could internalize the public health externalities of diesel cars in Delhi. Considering that the ex-showroom price of many popular diesel vehicles ranges from Rs 5 lakh to 12 lakhs, an ECC of 25-75% of may be needed to compensate for the environmental and health damage from diesel vehicles. At the same time, such a charge cannot prevent additional premature mortality impacts in the same way that a ban on the sale of these vehicles can. 
When it comes to PM emissions in India, diesel vehicles will not be as clean as their gasoline equivalents until the introduction of BS VI in 2020. The European experience has taught us that NOx emissions from diesel cars may remain high unless the BS VI standards are augmented with the World Harmonized Light-Duty Test protocol, a real world driving emissions test, and a rigorous in-service conformity program. None of these are included in the current BS VI standards proposal. 
Are there any other policy options beyond levying a punitive fee on diesel vehicles or banning their sale? One possible solution is for the diesel vehicle manufacturers to voluntarily agree to equip all new diesel vehicles sold in India with diesel particulate filters (DPFs) starting 1 April 2017 when 50ppm sulfur diesel fuel will become available across the country. The cost of installing a DPF is much lower than the health burden estimated above. And while emissions of other pollutants (particularly NOx) from BS IV diesel cars with particulate filters will not be as low as from gasoline vehicles, they would impose a dramatically lower public health burden compared with diesel vehicles that are not equipped with a particulate filter. State governments in the NCR could consider giving a small – say 2.5% – reduction in value-added tax (VAT) to encourage early adoption of the DPFs. Maybe it is time to import the No Diesel Without Filter scheme from Germany along with the diesel technology itself!

Tracking progress