Case Study: Tackling Smog in Urban Centers

Smog poses great risks by disrupting the health of individuals living in smog affected
areas. As a policy advisor for a large metropolitan city affected from severe smog level, four best
possible plan proposed by the local government includes,

Taxing high pollution industries- this plan included asking for additional taxes from the
industries emitting high levels of pollution during the time of year most affected by the smog.
The potential goal behind this strategy would be to not only discourage pollution but also raising
revenues for environmental projects for managing high levels of smog.

Limiting vehicles use during peak hours- This plan hypothesized restricting the number of
vehicles during peak hours (high traffic times). The potential goal behind this would be to not
only reduce traffic emissions, but moreover encourage alternative modes of transportation.

Providing subsidies for electric vehicles (EV) adoption- Government makes EV’s more
accessible and affordable by offering and introducing policies to provide financial incentives
(e.g., discounts) on buying EV’s.

Investing in Public transportation- Policies could be made keeping in mind the upcoming years
to improve buses, trains and other public transportation. This would encourage masses ro use
public transport to avoid hassle and travel in less expenses, thus reducing the traffic. The
potential goal included replacing high pollution vehicles with eco-friendly ones.

All interventions could be affected, but one needs to identify costs as well as benefits; before
implementing these strategies.

The table below will explain the possible costs benefit analysis.

Indirect
Policy Direct Costs Direct Benefits Indirect Costs
benefits
There will be increased Reduced-pollution as Long term
production i.e.. Higher limited emission from the improvement
Industry
production costs for the industries as they try to and
relocation with
factories, possible job adopt cleaner and less advancement
[Link] weaker
losses if companies pollution generating in clean
industries regulation that
relocate. There will be technologies, the technologies
could cause
administrative costs for government revenue
economic loss,
enforcing as well as increases for the
monitoring the tax environmental projects
[Link] Enforcementcosts, there Immediate reduction in There could be Consumer
vehicle use are sectors like delivery traffic congestion thus possible shift to
service that are there would be fewer backlash or carpooling,
dependent on free emissions of harmful resistance drom demand for
vehicles, thus could be particles from vehicles the public, public
economic cost from that majorly those transport.
 Indirect
Policy Direct Costs Direct Benefits Indirect Costs
benefits
There could be
who bread runs long term sift
from the this; of the public
department.
thus leading to for using
political shifts, public
transport.
Reduced fuel educed
demand, long- dependency on
term savings imported fuels
Increased-EV
Infrastructure
adoption,lower emissions
High-government ccallenges from
3. EV from vehicles, there can
expenditure on providing
subsidies be growth in green
providing subsidies. charging
sutomative sectors and
station.
related jobs
Increased
electricity
consumotion
costs.
High upfront investment
for their construction,
Long-term
[Link] maintenance and
Fewer emissions, reduced health benefits,
transport pollution regarding their
traffic congestion equity for low-
investment constructions, additional
income citizens
maintenance costs over
the time

What economic tools or analyses could help in estimating the net impact of these policies on
local businesses and citizens?

One tool could be input-output analysis------this include examining how industries are
interconnected, and how implementing theses policies could affect economy as a whole.

Economic impact studies- the purpose of this includes assessing how policies influence local
businesses, employment, and overall economic output.

Environmental Valuation Techniques (rephrase kr lena is ko)

 Purpose: Assigns monetary values to environmental benefits like cleaner air and reduced
health risks.
 Techniques:
o Willingness-to-Pay (WTP): Measures how much citizens value improvements in
air quality.
o Cost of Illness (COI): Estimates healthcare savings from reduced air pollution.