Fossil energy price and outdoor air pollution: predictions from a QUAIDS model

Document Type : Research Paper

Authors

1 Department of Epidemiology, School of Public Health, Iran University of Medical Sciences, Tehran, Iran.

2 Department of Health Management and System Sciences, School of Public Health and Information Sciences, University of Louisville, 485 E. Gray St., Room 115, Louisville, Kentucky 40202, USA.

3 Preventive Medicine and Public Health Research Center & Department of Community and Family Medicine, Iran University of Medical Sciences, Tehran, Iran.

4 Research Center for Environmental Health Technology & Department of Environmental Health Engineering, School of Public Health, Iran University of Medical Science, Tehran, Iran.

5 Research Center for Addiction and Risky Behaviors (ReCARB), Psychosocial Health Research Institute (PHRI), Department of Epidemiology, School of Public Health, Iran University of Medical Science Tehran, Iran.

Abstract

Cheap fossil energy leads to overconsumption of energy and hazardous levels of air pollution. In this study, we provide a framework to connect fossil energy price policy to private consumption of energy and outdoor air pollution. We used a consumer demand system and reassessed it for the recent status of the Iranian economy. We extracted household consumption information from Iran’s 2011 and 2014−2016 annual household surveys (n=154683), prices from the Central Bank of Iran’s detailed monthly price indices from 2008 to 2016, and air pollution information from Iran’s Energy Balance Sheets. We estimated that an average Iranian household would reduce its energy consumption by 2%, 16%, 29%, 38%, and 45% if energy prices were hiked by 10%, 50%, 100%, 150%, and 200%, respectively. The corresponding reductions in total outdoor air pollution in the post-hike period would be 2.6, 26.3, 47.6, 62.9, and 74.5 million tons, respectively. Besides highlighting the importance of fossil energy price policy as a short-term strategy to reduce air pollution, this study calls attention to shifting the existing subsidies on fossil fuels to sustainable sources of energy such as waste-oriented biofuels as a -long-term solution.

Graphical Abstract

Fossil energy price and outdoor air pollution: predictions from a QUAIDS model

Highlights

  • Fossil Energy price subsidy encourages overconsumption and elevates air pollution.
  • A 100% energy price hike leads to a 29% decrease in household energy consumption.
  • A 100% energy price hike leads to a 62.9 million ton reduction in air pollutants.
  • A 200% energy price hike leads to a 45% decrease in household energy consumption.
  • A 200% energy price hike leads to a 74.5 million ton reduction in air pollutants.   

Keywords

References

[1] Ahadi, S,N.M., Roshani, M., 2018. Tehran air quality report 2017.
[2] Atamanov, A., Mostafavi, M.H., Salehi-Isfahani, D., Vishwanath, T., 2016. Constructing robust poverty trends in the Islamic Republic of Iran: 2008-14. The World Bank Group.
[3] Bank, J., Blundell, R., Lewbel, A., 1997. Quadratic Engel Curves and Consumer Demand. Review of Economics and Statistic. Econ. Papers. 79(4), 527-539.
[4] Bank, T.W., 2020. The World Bank, International Comparison Program Database. PPP conversion factor, private consumption (LCU per international $) - Iran, Islamic Rep.
[5] Bayat, R., Ashrafi, K., Motlagh, M.S., Hassanvand, M.S., Daroudi, R., Fink, G., Künzli, N., 2019. Health impact and related cost of ambient air pollution in Tehran. Environ. Res. 176, 108547.
[6] Cai, Y., Zhang, B., Ke, W., Feng, B., Lin, H., Xiao, J., Zeng, W., Li, X., Tao, J., Yang, Z., Ma, W., 2016. Associations of short-term and long-term exposure to ambient air pollutants with hypertension: a systematic review and meta-analysis. Hypertension. 68(1), 62-70.
[7] CBI., 2020. Economic Research and Policy Department, Economic Time Series Database. Tehran, Iran.  
[8] Center, T.I.P.R., 2019. The IRI parliament research center. about energy subsidy in Iran: (1) the hidden subsidy. Topical Code 310, Serial Code 16652.
[9] Coady, D., Parry, I., Le, N.P., Shang, B., 2019. Global fossil fuel subsidies remain large: an update based on country-level estimates. IMF Working Pap. 19(89), 39.
[10] Davis, L.W., 2017. The environmental cost of global fuel subsidies. Energy J. 38(KAPSARC Special Issue).
[11] Deaton, A., Muellbauer, J., 1980a. An almost ideal demand system. Am. Econ. Rev. 70(3), 312-326.
[12] Deaton, A., Muellbauer, J., 1980b. Economics and consumer behavior, Cambridge university press.
[13] Dehghan, A., Khanjani, N., Bahrampour, A., Goudarzi, G., Yunesian, M., 2018. The relation between air pollution and respiratory deaths in Tehran, Iran-using generalized additive models. BMC Pulm. Med. 18(1), 49.
[14] Del Granado, F.J.A., Coady, D., Gillingham, R., 2012. The unequal benefits of fuel subsidies: a review of evidence for developing countries. World Dev. 40(11), 2234-2248.
[15] Energy, I.M.O., 2020. Iran Ministry of Energy, Office of Planning and Macroeconomics of Electricity and Energy. Energy Balance Sheets. Tehran, Iran.
[16] Enriquez, S., Larsen, B., Sánchez-Triana, E., 2018. Energy Subsidy Reform Assessment Framework: Local Environmental Externalities Due to Energy Price Subsidies-A Focus on Air Pollution and Health, World Bank.
[17] Fassihi, F.G.R., 2019. Iran abruptly raises fuel prices, and protests erupt. New York Times.
[18] Ferreira, F.H., Chen, S., Dabalen, A., Dikhanov, Y., Hamadeh, N., Jolliffe, D., Narayan, A., Prydz, E.B., Revenga, A., Sangraula, P., Serajuddin, U., 2015. A global count of the extreme poor in 2012: data issues, methodology and initial results. The World Bank.
[19] Gahvari, F., Karimi, S.M., 2016. Export constraint and domestic fiscal reform: lessons from 2011 subsidy reform in Iran. Q. Rev. Econ. Finance. 60, 40-57.
[20] GPP., 2019. GlobalPetrolPrices.com. Retail energy price data: electricity prices, kWh, September 2019.
[21] GPP., 2020. GlobalPetrolPrices.com. Retail energy price data: gasoline prices, liter, 23-Mar-2020.
[22] Guarnieri, M., Balmes, J.R., 2014. Outdoor air pollution and asthma. The Lancet 383(9928), 1581-1592.
[23] Haidar JI, K.S., 2020. Sanctions and household welfare: evidence from Iran.
[24] Karimi, S.M., Maziyaki, A., Moghadam, S.A., Jafarkhani, M., Zarei, H., Moradi-Lakeh, M., Pouran, H., 2020. Continuous exposure to ambient air pollution and chronic diseases: prevalence, burden, and economic costs. Rev. Environ. Health. 1(ahead-of-print).
[25] Kusch-Brandt, S., 2019. Urban Renewable Energy on the Upswing: A Spotlight on Renewable Energy in Cities in REN21’s “Renewables 2019 Global Status Report”. Multidisciplinary Digital Publishing Institute.
[26] Labandeira, X., Labeaga, J.M. and López-Otero, X., 2017. A meta-analysis on the price elasticity of energy demand. Energy Policy 102, 549-568.
[27] Roth, G.A., Abate, D., Abate, K.H., Abay, S.M., Abbafati, C., Abbasi, N., Abbastabar, H., Abd-Allah, F., Abdela, J., Abdelalim, A., Abdollahpour, I., 2018. Global, regional, and national age-sex-specific mortality for 282 causes of death in 195 countries and territories, 1980-2017: a systematic analysis for the Global Burden of Disease Study 2017. The Lancet. 392(10159), 1736-1788.
[28] SCI., 2020. Statistical Center of Iran, Statistical Surveys: Household Expenditure and Income Survey. Tehran, Iran.
[29] SCI., 2020. Statistical Center of Iran. Price Indices of Consumption Goods and Services. Tehran, Iran.
[30] Sicard, P., Khaniabadi, Y.O., Perez, S., Gualtieri, M., De Marco, A., 2019. Effect of O3, PM10 and PM2.5 on cardiovascular and respiratory diseases in cities of France, Iran and Italy. Environ. Sci. Pollut. Res. 26(31), 32645-32665.
[31] Sørensen, M., Lühdorf, P., Ketzel, M., Andersen, Z.J., Tjønneland, A., Overvad, K., Raaschou-Nielsen, O., 2014. Combined effects of road traffic noise and ambient air pollution in relation to risk for stroke?. Environ. Res. 133, 49-55.
[32] Turner, M.C., Krewski, D., Diver, W.R., Pope III, C.A., Burnett, R.T., Jerrett, M., Marshall, J.D., Gapstur, S.M., 2017. Ambient air pollution and cancer mortality in the cancer prevention study II. Environ. Health Perspect. 125(8), 087013.

Files

Cited by

Share

How to cite

Statistics