MUNGATANA: Mobile Source Pollution Management in Nairobi
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POLICY INSTRUMENTS FOR MOBILE SOURCE POLLUTION MANAGEMENT: THE
CASE OF NAIROBI, KENYA
ERIC DADA MUNGATANA
DEPARTMENT OF AGRICULTURAL ECONOMICS AND RESOURCES MANAGEMENT
MOI UNIVERSITY, ELDORET, KENYA
[Work in progress]
1 INTRODUCTION
The transport sector is important from an environmental viewpoint: it is one of the main
users of energy and a particularly prominent source of air pollutants [STERNER 2003].
It also accounts for several other important external costs such as congestion,
accidents, noise and barrier effects [e.g., large roads create barriers to communication
and movement of both humans and animals when they cut through a community
effectively making it difficult for people to shop, socialize, or work on the other side of
the road]. The sector has long been one of the main topics of environmental attention in
the industrialized countries, and in the past decade, issues of air pollution have taken
priority in developing countries, too.
According to STERNER [2003] motor vehicles are a major source of air pollution.
Typical values for the vehicle share in total air pollution range from 40% to 99% for
carbon monoxide, hydrocarbons and nitrogen oxides and are somewhat lower for fine
particulate matter. Two of the three most important health related problems in
Bangkok are air pollution and lead contamination, both of which are to a large extent
caused by motor vehicles [FAIZ, WEAVER & WALSH 1996]. The transportation sector
is an important contributor to global warming, acidification and local air pollution in
mega cities. In some rural areas of poor countries, run off and soil erosion due to roads
may be significant; water flowing along a hilly road, for example, can erode the soft
surrounding soil and may even cause landslides. In heavily urbanised high-income areas,
valuable time is lost as a result of traffic congestion; furthermore, congestion
increases other costs, such as those related to emissions. Given the potential for
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environmental damage that the transport sector has, it seems prudent that the
relevant government Ministry should have a very special interest in its management.
However, it is regrettable to note with great concern that this is not the case in
Nairobi Kenya.
1.1 THE PROBLEM
Nairobi is the capital city of Kenya. According to the KENYA POPULATION CENCUS of
1999, Nairobi had a population of 2,143,254 of the 28,686,607 inhabitants of Kenya.
This means that the city holds about 7.4% of the total population of Kenya. With a
population density of 3,079 persons per square kilometre, Nairobi also has the highest
population density in Kenya1. In addition, Nairobi scores the largest share in various
macroeconomic indices like the total number of motor vehicles registered in the
country, employment, GDP, manufacturing industry concentration and national energy
consumption. Given this importance that Nairobi plays in the Kenya economy, it is rather
surprising that no data exists on the status of atmospheric loading in the city.
Indeed, it would be unfair to claim that the Government of Kenya [and other NGOs] do
not care about the status of atmospheric pollution given that several forums have been
organised within the current calendar year where issues of atmospheric pollution
management featured prominently. Between September 3rd and 5th 2003, there was a
workshop on Climate Change, Energy and Technology: Opportunities and Incentives for
Investment in Africa. The workshop, which was organised by the Bureau of
Environmental Analysis International [BEA], was basically interested in strategies that
African countries can adopt to benefit from CDMs within the UNFCCC. Again, between
September 15th and 19th 2003, the Government of Kenya organised a Kenya National
Energy Policy Review Workshop whose main concern was to develop a policy that can
avail cheap and sustainable energy to a majority of Kenyans especially in the rural areas
within the context of poverty alleviation and sustainability. Finally, between November
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22nd and 23rd 2003, Climate Network Africa [CNA] organised a workshop on Energy
Demand, CDM, NEPAD and Millennium Development Goals in East Africa. As the title of
the workshop suggests, it was also about CDMs within the UNFCCC.
Now, it is not the opinion of this proposal that the above efforts are misguided-they
indeed are very useful in that they try to embed national and regional energy policies
within international agreements and policies. However, such efforts are addressing
other, albeit important, issues relating to energy and the environment. These concerns
are global in nature: they are focused on the mitigation of greenhouse gas emissions. On
the ground, nobody seems to understand the welfare effects of continued energy use
by the transport sector in Kenya and more so in Nairobi, whose important
microeconomic role in the Kenyan economy has already been espoused. On several
occasions, I have tried unsuccessfully to get answers to questions like:
o
Who addresses issues of urban atmospheric pollution in Kenya? If there is a
Ministry or Department that addresses these issues, what kind of data do they
collect?
o
How many motor vehicles are licensed to operate in Nairobi? What is their make
and age? What kinds of propulsion systems and fuels do they use? What
intensity of pollution do they cause?
o
What is the status of public transport in Nairobi in terms of roads and public
service vehicles?
If someone wanted to address the above questions and other similar questions, one
would most likely be told that if the data exists ever then it is very fragmented, an
answer that is not very useful in the interest of formulating policies for improved air
quality management in Nairobi. The main objective of this proposal is to address this
shortfall for the purpose of ensuring sustainability in the use of the atmosphere as a
sink.
1
Mombasa, the second largest city in Kenya has a population density of 2,896 persons per
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1.2 OBJECTIVES2
The overall objective of this proposal is to identify economic instruments that policy
makers can adopt to enhance the management of air quality in Nairobi. It should thus be
clear that my main interest in this proposal is with identifying the correct POLICY and
ensuring that it is implemented in such a way that it will produce the desired results.
o
The research will specifically work towards identifying those instruments that
are likely to succeed given the prevailing economic, political, social, institutional
and environmental circumstances prevailing in Kenya.
o
The proposal will suggest a structure that would help more rigorously define the
problems to be solved, identify a number of critical questions that need to be
resolved in searching for solutions and discuss the potential solutions and trade
offs involved.
o
The proposal will seek to understand the process of introducing policy reforms
into the existing policy regime, the supporting conditions necessary for such
reforms to work and to identify the potential effects of the new policy
instruments on societal factors such as poverty and sustainable development.
The rest of this proposal is structured as follows3: In part 2 of the proposal, I present
the environmental damage function resulting from road transportation. It will transpire
that the relationship between emissions and welfare damage so complicated further
complicating the design of appropriate policy response. Part 3 of the proposal will be on
the economic instruments that can potentially be used to manage mobile source
pollutants. In a sense, in this part I try to discuss the progress that has so far been
made in managing mobile pollution sources in other parts of the world, with a view of
providing a theoretical background on how one can go about managing the same problem
Kilometre Square.
2
I have deliberately decided to frame the objectives in a very broad sense for the reasons that
when attempting to solve a broad problem with very little information at hand, sometimes it is
fairly difficult to be precise about where the emphasis of the research should be. I am hoping to
resolve this ‘scoping problem’ thorough interaction with other participants in the workshop.
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in Nairobi. It will become apparent that most of the tools that are used for managing
mobile sources of pollutants are indeed very advanced making their application in
developing economies particularly problematic. However, there are some other ‘secondbest’ tools that can be applied in a developing country context. Part 4 is dedicated to
developing the design that this study will follow in data collection.
2 ENVIRONMENTAL DAMAGE CAUSED BY TRANSPORTATION
Vehicle pollution may be global, regional or local. Noise is a local problem, whereas smog
is local or possibly regional. Carbon dioxide emissions are global, because the negative
effects of CO2 on the environment are cumulative and affect the whole world
independent of time and location. It follows that the damage function is very complex
and depends on a number of variables as discussed below.
2.1 VEHICLES
The main global damage associated with transport is the emission of carbon dioxide into
the atmosphere and the consequent climate change. The fuel and engine characteristics
that give rise to various emissions vary very much. Local externalities include
congestion, noise and air pollution. The modelling of the damage from pollutants must
account for several complicated technical, atmospheric, chemical, ecological and health
aspects.
o
The vehicle emissions contain thousands of chemicals that may vary considerably
depending on fuel and vehicle characteristics
o
The pattern of atmospheric reactions and the transport of these pollutants
involves many factors that depend crucially on the weather as well as the
topography of the city. This means that translating emissions into ambient levels
of pollution is complicated.
3
I am still in the process of completing Part 3 of this proposal. Part 4 of the proposal will be
concluded upon return from ADDIS.
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The next level of complication is estimating the damages to health, ecosystems
and capital caused by these levels of pollution. The damage depends largely on
population density. The dose-response functions for human health are
complicated by the long run gestation of many of the induced medical conditions.
Effects also vary with respect to timing [e.g., problems related to tropospheric
ozone are highest during the summer and noise is worst at night].
o
Ultimately, the damages have to be valued, which introduces another series of
difficulties. Translating mortality, morbidity, suffering and days of work lost
due to sickness into monetary values presents methodological as well as ethical
problems.
We can thus summarise the damage function as thus:
o
Damages vary dramatically with respect to the exact time and location of the
emissions
o
The health costs depend on the number of people affected and are considerably
magnified in the city centre
o
Location and timing can account for differences of several orders of magnitude
o
Environmental damage also depends on such factors as fuel choice, driving style
and weather conditions.
Abatement costs also vary because they incorporate the costs of driving less often,
scrapping cars, retrofitting vehicles, and similar actions-the costs of which vary
enormously between vehicles. As a result, the potential gains from market instruments
are large.
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2.2 LOCATION
Damages to health often make up a large percentage of local pollution costs. Exhaust
emissions tend to disperse quickly, which makes the exact location of emissions a crucial
factor in determining the extent of the damage. Driving in an area where the density of
exposed population is high results in higher environmental damages than driving in an
area where few people are exposed to emissions. In fact even the population
characteristics may be important: children, pregnant women, and people with certain
ailments are more sensitive to pollutants. This means that the damage would be higher
near a maternity ward, hospital or school than when driving elsewhere.
Other geographical and climatologic conditions are equally important. Many of the worst
affected urban areas have distinctive features, such as high altitude or being
surrounded by mountains, such as Mexico City. The table below presents an estimate of
the importance of geographical location for Gothenburg, a city of 0.5million.
Table 1: Environmental Values and Geographical Location
Pollutant
Regional
Local environmental [health] effects [USD/kg]
environmental
Country
City average
City centre
effects
[USD/kg]
VOCs
1.7
0
5
25
NOX
4.0
0
5
25
PM
0
18
90
450
SOURCE: Table 19-1 in STERNER 2003 Pg 224
The values build on conditions that include population density, climate, fuel, vehicle
stock characteristics and willingness to pay for averting respiratory diseases, which are
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related to income levels and many other specific conditions. The values do reflect large
differences in health values in the inner city, the suburbs and the country. This
variation is derived mainly from the differences in the number of people exposed and
might be similar in similar towns. In large, densely populated cities, the differences may
even be greater.
2.3 VEHICLE AGE
The power of technical progress in the area of engine and exhaust technology is
considerable [see STERNER 2003 P225, especially Table 19-2]. There is evidence to
show that from the 1988 cars to the 2000 cars, emissions of VOCs, NOX and PM
improved on the order of 5-10 times. In previous decades, similar progress, broadly
speaking, took place. The advent of the catalytic converter also resulted in reductions
of one to two orders of magnitude for many pollutants. Similarly, future emissions could
be expected to be much lower than current one. The divergence between new and old
cars can be expected to be even bigger in poor countries because of the tendency to
keep cars that would otherwise be scrapped in richer countries.
2.4 ENGINE TEMPERATURE AND OTHER FACTORS
Many engine parameters are important for the rate of emissions. One is engine
temperature, which has a large effect in cold climates, because combustion is much less
complete before the engine and the catalytic converters have warmed up. Table 2
below, based on STERNER [2003] Pg 226 Table 19-3 shows the effect of temperature
on emissions for a car with catalytic converter. In cold climates, a significant share of
total VOCs and CO is typically emitted during the first kilometre driven. Because most
urban trips are fairly short [often averaging under 5 kilometres], cold start related
emissions typically make up more than half of total emissions of VOC S and CO but not
NOX . Using cleaner fuels, preheating the engine or the catalytic converter or using
faster catalytic converters, can reduce these emissions. Considering the importance of
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this factor, special attention may be warranted because it is unlikely to be picked up by
other policy instruments that policymakers choose.
Table 2: Effect of Temperature on Emissions for a Car with Catalytic Converter
Outdoor
1st KM driven
2nd KM driven
Warm engine
temperature
VOC S
CO
VOC S
CO
VOC S
CO
22
2.6
21.0
0.07
0.16
0.02
0.12
-7
15.7
123.1
1.38
11.0
0.25
0.80
[0C ]
Similarly, several other factors like weather, fuel, driving style and congestion have a
strong influence on total environmental damage. The most noticeable weather factor is
wind. In some locations, patterns of weather known as thermal inversion, where cool air
traps a warmer bubble of air over a city so that air cannot disperse, cause pollutants to
accumulate over several days reaching very high levels. Fuel quality [e.g., chemical
composition, the use of reformulated fuels, and the additions of alcohols and ethers]
can have substantial effects on health, which are strongly reinforced during thermal
inversion. One striking example of the importance of fuel composition is the use of lead
additives in gasoline. For driving behaviour, significant environmental improvements are
possible and good logistical planning in transportation companies could cut fuel use and
emissions considerable.
Congestion causes a double effect. First, the time cost of a vehicle mile rises rapidly
with increased congestion, because the addition of a vehicle to an already congested
network increases travel time for many other passengers. In addition, this effect tends
to interact with emissions: because the average speed is reduced to levels that are far
below the optimal operating speed for vehicles, the rate of emissions per mile increases
as well.
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3 POLICY CONTROL INSTRUMENTS FOR ROAD TRANSPORT
The purpose of this section is to review three kinds of policy control instruments that
have been used in the road transport sector:
o
Environmental road pricing
o
Taxation or regulation of fuel efficiency
o
Fuel quality, vehicle standards and urban planning
3.1 ENVIRONMENTAL ROAD PRICING
One specific approach to paying for the environmental damage caused by the
transportation sector is environmental road pricing. Current interest in pricing traffic
efficiently includes all externalities, health effects, regional environmental effects,
global warming, noise, barrier effects, road damage and accidents. Whereas no country
has yet been able to implement advanced environmentally differentiated road pricing,
some sophisticated examples of road pricing, area licensing, and mileage taxes include
advanced traffic management schemes in Singapore, toll roads in Norway and a road
pricing scheme in Switzerland that uses GPS.
CALCULATING ENVIRONMENTAL DAMAGE FROM ROAD TRANSPORTATION
The cost that is relevant for a Pigovian tax is the sum of damages incurred [see
equation 6-3 Pg 74 STERNER 2003]. For a certain vehicle, this cost is not easy to
calculate because many complex processes govern emissions and because of the causal
chain from emission to ambient pollution, exposure and damages. Consider the following
stylised damage function based on STERNER [2003]:
D  De, g, t, w where
D
Damage
e
Vehicle emissions
[1]
MUNGATANA: Mobile Source Pollution Management in Nairobi
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Location
t
Time of the day
w
Weather
11
Vehicle emissions are equal to distance m  times emissions rate   , which is a function
of vehicle characteristics v  , fuel characteristics
 f  , outside temperature t o  , road
condition o  and a vector of driving related variables (z): speed, vehicle maintenance,
acceleration patters and engine temperature    v, f , t 0 , o, z  . In practice, one of the
main determinants is congestion, which determines average speed. A perfectly
differentiated Pigovian tax like this is not possible, but some form of environmentally
differentiated road pricing might be as shown in STERNER [2003 Box 20-1 Pg 229].
However as shown, introducing such a tax involves the installation of fairly complicated
equipment in a vehicles. This tool also has a number of potential problems including
privacy, tampering and the period of ‘transition’ before all vehicles are fitted with this
equipment.
SIMPLER PRICING SCHEMES
It is not possible to build a single monolithic tariff system that relies on all vehicles
having all the relevant equipment before the system can operate. No town in the world
has yet implemented full-fledged environmental road pricing, and in fact, it may be too
expensive to obtain all the potential cost savings because of the high cost of
information, administration and transactions. Therefore the instruments that are
available in the transportation sector should be considered as a useful benchmark for
comparison. The following road pricing schemes will be discussed:
o
Area licenses
o
Mileage taxes
o
Road tolls
o
Differentiated vehicle taxes
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AREA PRICING
One simple road-pricing scheme is the area pricing system, T  f g  , or possibly a more
sophisticated
system
that
differentiates
by
time
of
the
day
and
vehicle
characteristics, T  f g, t , v , which mainly targets the problem of congestion and
pollution hot spots. Norway has road pricing in Trondheim, Oslo and Bergen. In 1991,
Trondheim implemented a ‘toll-ring’ around the city that is used by a large majority of
drivers entering the city. Frequent drivers use an electronic card system while
infrequent ones use coin machines. Rates are high during 6.00HRS and 10.00HRS than
during the rest of the day. As a result, traffic has declined by some 10% during rush
hours while trips at other times and by bus have increased. Revenues are used for road
infrastructure, public transit, pedestrian and bicycle facilities. Another example of
road pricing is in Singapore [see STERNER pg 232 Box 20-2] and the concept is
spreading to cities in Europe and the United States.
MILEAGE TOLLS AND ROAD TOLLS
These road pricing instruments typically have fees per mile, T  f m, v  , which may or
may not be differentiated by the various characteristics of the vehicle or other
factors. Their simplicity keeps down the cost of monitoring and fee collection. In
several locations worldwide, vehicles that travel certain TOLL ROADS AND BRIDGES
may use passes that transmit a signal to a transponder. If a vehicle does not have a
valid pass, its license plates may be photographed and a bill automatically sent to the
vehicle owner. MILEAGE TAXES are a national equivalent of the road toll, but they do
not have any particular point of collection. They apply to all roads and are assessed on
the basis of periodic readings of vehicle odometers.
The environmental effect varies depending on the type of road tolls. Tolls on existing
congested roads can be used to reduce congestion and pollution in an area but this role
must be distinguished from the financing of new roads. Mileage taxes and road tolls can,
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in principle, be differentiated with respect to environmental aspects. Usually, road tolls
are based on the size or weight of the vehicle, which is an important factor determining
the wear and tear on roads as well as the level of emissions.
DIFFERENTIATED VEHICLE TAXES
Environmentally differentiated vehicle taxes, T  f e or T  f v  , are an intermediate
option between road pricing and the pure CAC strategy based on emissions standards.
Taxes are usually levied on vehicle sales [especially new vehicle sales] as well as annual
registration
fees.
Several
arguments
favour
a
system
of
taxes
based
on
ENVIRONMENTAL CLASSES [e.g., does a car have a catalytic converter?] of vehicles:
o
First, it creates incentives for dynamic efficiency i.e., for car manufacturers to
make cost efficient improvements beyond current emission standards. Although
theoretically less efficient than perfect road pricing [the system does not
specifically target vehicles with high mileage or vehicles that drive in the cities],
such a system provides incentives at a modest administrative cost.
o
Second, such a system may be part of a ‘second best’ strategy because of
incomplete and asymmetric information. The authorities have limited information
concerning the costs of tougher emission standards and environmental classes
may provide a way of obtaining such information. If the difference in tax
between the environmental classes is sufficient to create an output response
from manufacturers, then the additional cost is less than or equal to the
difference. This kind of information is crucial for future policy decisions.
o
Third, the same environmental classification [extended with classes of older
vehicles] can also serve for road pricing purposes.
o
Fourth, such a system would provide incentives for environmentally aware
consumers and to companies with a ‘green’ image to buy environmentally friendly
vehicles.
o
Finally, a large share of new vehicles are bought as company cars. A few years
later, they typically are sold and become private cars. The buyers of the used
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cars have much less influence on environmental characteristics than the original
buyers. Policies that can affect the environmental image of the people or
companies buying the company cars have an important effect on the whole fleet.
Environmental differentiation of the sales tax of new cars might be more effective
than a corresponding differentiation of the annual taxes because the later are
implicitly discounted at a higher than market rate of interest. Because new cars are
thought of as luxury items, some people may find the high excise tax warranted.
However, such taxes may be detrimental from a strictly environmental viewpoint. Old
cars typically are more polluting: to decrease air pollution it is desirable to speed the
turn over rate of the vehicle fleet as is consciously done in Japan.
3.1 TAXATION OR REGULATION OF FUEL EFFICIENCY