DEVELOPMENT RESEARCH NEWS
Table 1.
Health benefits derived from two options to reduce lead emission, National Capital Region, 2000-2006 (In million pesos)
Option With price differentiation between leaded and unleaded gasoline With leaded gasoline ban
Table 2.
March - April 2000
3
2000
2001
707
1,219
4,565
5,452
2002
2003
2004
2005
2006
2,010
2,686
4,162
5,605
7,666
6,502
7,749
9,232 11,000 13,110
Projected social net benefits derived from two options to reduce lead emission, National Capital Region, 2000-2006 (In million pesos)
2000 Private Net Benefits With higher tax differentiation With leaded gasoline ban
2003
2004
4,906
2005
1,393
2,414
3,270
5,133
6,963
8,161
9,571 11,232 13,196 15,522
(174)
(404)
(444)
(744)
6,423
2006
8,874
(817) (1,207)
(1,376) (1,511) (1,659) (1,822) (2,000) (2,196) (2,412)
Social Net Benefits With higher tax differentiation With leaded gasoline ban
2002
865
Government Net Benefits (Tax Loss) With higher (158) tax differentiation With leaded gasoline ban
2001
707
1,219
2,010
2,826
4,162
5,605
7,666
3,757
5,452
6,502
7,749
9,232 11,000 13,110
lutants must be put into place. What instruments and approaches therefore should be adopted and used? In two separate papers dealing specifically with lead and PM10 emission control, respectively, by the same authors, alternative approaches were examined. Two alternative approaches to reduce lead emissions from motor vehicles were presented while three alternatives to reduce PM 10 emissions were looked into.
Lead emission control The two proposed options to pursue the reduction of lead emissions are: (1) implement a price differential between lead and unleaded gasoline favoring unleaded and (2) ban leaded gasoline by the year 2000. Table 1 shows the result of the computations of the health benefits for the period 2000 to 2006 under the two options while Table 2 compares the projected social net benefits between the two options. Assessment of the two alternatives The study reveals that the ban on leaded gasoline is the more attractive option because not only are health benefits enjoyed instantaneously, amounting to P4.6 billion in year 2000 (Table 1) as health damages associated with air lead exposure will be zero starting year 2000, and to P13.1 billion by year 2006, but the present value of social net benefits (i.e., health and technical cost less tax loss) is also higher (Table 2). Furthermore, the ban is also the more cost-effective option as health benefits far exceed the technical cost associated with the ban. Technical cost includes engine modification of P531.0 million; storage cost of excess lead of P0.20 million; sunk cost of purchased lead of P185.0 million; and technical to page 6