In November 1989, Mexico City introduced a programme somewhat similar to the Even-Odd formula presented by the Delhi government to curb the air pollution in the city. The initiative in Mexico City, was called Hoy No Circula—Today it [your car] does not circulate. It barred drivers from using their vehicles on one workday per week based on the last digit of the vehicle’s license plate. In 2007, Lucas Davis, the faculty director at the Energy Institute at the Haas School of Business in the University of California, Berkeley, studied the impact of the programme on the air quality of Mexico City. The result of his study showed that the currently ongoing enterprise “was absolutely ineffectual.”
Yesterday, Davis spoke to Atul Dev, a web reporter at The Caravan, about the flaws in a policy that attempted to curb pollution by imposing driving restrictions, the reasons for its failure, and the lessons that Delhi stands to learn from Mexico City.
Atul Dev: What did you find in your study of the rotational ban on vehicles in Mexico City on the basis of their licence plates?
Lucas Davis: The Mexico City programme only restricts one-fifth of the total cars each day. So for example, if your licence plate ends in a five or a six, you can’t drive on Monday. The programme was implemented in November 1989. And when I examined the air quality of Mexico City in 2007, I found no data indicating that the program had improved the air quality of the city. It just did not work out. It was absolutely ineffectual.
First, it was hoped that the programme would lead people to substitute to lower-emitting forms of transportation: like the Mexico City metro, or the bus network. When I examined measures of ridership from the subway and the bus system, I didn’t find any evidence of increased ridership. So it didn’t look like that the programme successfully encouraged people to switch to public transportation. Instead, people continued, in different forms, to travel in cars. Some people went out and bought additional cars, and I show in my paper that the number of registered vehicles increased in the years following the introduction of the programme by the government. Some people, who were driving earlier, started to carpool, but an equal number also went to taxis.
I would expect to see the same in Delhi. I would expect to see people taking cabs and rickshaws and other forms of private transportation rather than walking or cycling.
AD: What was the state of public transport in Mexico City at that time?
LD: Mexico City has had an amazing public transit system. The metro and the buses cover a majority of areas. That is why the failure of the programme is disappointing: they had the infrastructure and they still couldn’t get people to use it. It could have actually improved the air quality substantially. The reason behind that is that, I think, it is very difficult to get people to switch, particularly from a car, to public transport. At least it was so in Mexico City, they simply just didn’t want to go to slower and less convenient forms of transportation.
AD: What was the Mexican government’s response to your study?
LD: See, even in the beginning, there was no evidence that the programme had improved air quality. The programme is still in place in Mexico City. The government still regards it a success. There is no evidence that it is a success, but the Mexico City government continues to think that it has had air quality benefits. I think that they are wrong. I think that my study, in fact, is pretty strong evidence that the programme is not working, but it has been ignored. The argument that they would make is that “it could have been worse.”
AD: In your study, you state that your findings have implications for air quality and transportation policies throughout the urban developing world. What lessons, in your opinion, should Delhi take from the cities that have followed a similear policy?
LD: So, the more I have studied these policies, the more disappointed I have been. It is the kind of policy that sounds good when you first hear about it, but then, the more you think about it, the more you realise that there are so many different ways for drivers to circumvent these policies. What ends up happening, almost inevitably, is that the benefits of the program are not realised the way you expect them to be.
There are about a half-dozen other studies on similar measures taken up by governments elsewhere around the world. There have been several studies on Beijing, which implemented restrictions in 2008. But in this case it is very hard to learn anything conclusive from the evidence in Beijing, because a whole bunch of other policies, associated with the 2008 Olympics, were also implemented at the same time.
People respond to these policies, and what we saw in Mexico City is that they responded by continuing to travel in private cars through new ways. The policy in itself can’t help. As we see in the paper on Mexico City, gas consumption didn’t go down, air quality didn’t improve, and the benefits of the programme are negligible, if any.
Delhi, given what it is going through now, will need stronger and stringent measures.
AD: So you are saying that rather than policy, this has to be a behavioural change?
AD: What might be a way to address these behavioural patterns?
LD: In my opinion, it is impossible to prevent these kind of behavioural responses. It happens when you use indirect policies like this—driving restrictions instead of surge pricing—people are going to find ways to avoid the policy.
That is why I think that driving restrictions are fundamentally flawed. I don’t think there is a way to fix it. I think the government should instead price congestion and price gasoline. In a city like Delhi, especially in the position it finds itself today, you should have very high gasoline and diesel prices, because externalities from driving are very, very large.
AD: Another problem that Delhi may face if the Even-odd formula is implemented, is that of overburdened public transport. How would you suggest addressing that?
LD: I think we need dynamic prices to address this issue. What I mean by dynamic pricing is that the metro should be more expensive during the peak hours. It would automatically lead to people switching their timings of travel, and it will also lead to a spillover in other forms of transport—like buses. That is how a city can use its metro more efficiently.
Of course, the public transport system should be ready for that too. But see, I am an economist so I believe in taxing externalities. That means higher gas pricing. It also means congestion taxes. For example, we now have the technology to tax the driver depending upon the hour of the day they drive in. If you make it more expensive for people to drive, then they will find other ways to get around. That would be a direct policy result.
Now, that would require some investment in the beginning. For example, look at what Singapore has done: every car has a GPS transponder in it, it charges you depending upon climate, day, time and area you are driving in. It would be expensive, but this is a big deal! The welfare cost of traffic congestion on public health in Delhi is enormous. So these are investments that would pay for themselves.
AD: If this is an inefficient move to fight degrading air quality in our cities—and your study had indeed found it to be inadequate—what alternatives are we left with?
LD: We are going to have two billion vehicles on the planet by 2030, and these kind of driving externalities are going to be a huge problem around the world. There is no alternative to taxing gasoline. Subsidies on gasoline are crazy at this point; you just have to take them away.
Though that is a big measure and will affect things drastically, what you can do is tax gasoline and give money to people in different ways. Indonesia, for example, just did this. They rolled the money back in unconditional transfers to people: everyone receives a certain amount every year from the government and gas prices go up at the same time. But, then, everyone in Indonesia, even very-low- income people have bank accounts, so it is possible to make deposits.
This interview has been edited and condensed.
Atul Dev is a staff writer at The Caravan.