Therefore, the subsidy must be for a socially beneficial purpose. If evidence emerges that the behavior encouraged by the subsidy is harmful, the subsidy should forthwith be withdrawn.
In some cases, the activity could be taxed to discourage it further. This is why governments tax cigarettes.
Last week the World Health Organization issued an important finding. It concluded that diesel engine exhaust is carcinogenic to humans.
The news release (http://press.iarc.fr/pr213_E.pdf) included the following expert opinions:
Dr Christopher Portier, Chairman of the International Agency for Research on Cancer (IARC) working Group, stated that “The scientific evidence was compelling and the Working Group’s conclusion was unanimous: diesel engine exhaust causes lung cancer in humans.”...
Dr Kurt Straif, Head of the IARC Monographs Program, indicated that “The main studies that led to this conclusion were in highly exposed workers. However, we have learned from other carcinogens, such as radon, that initial studies showing a risk in heavily exposed occupational groups were followed by positive findings for the general population. Therefore actions to reduce exposures should encompass workers and the general population.”Dr Christopher Wild, Director, IARC, said that “while IARC’s remit is to establish the evidence-base for regulatory decisions at national and international level, today’s conclusion sends a strong signal that public health action is warranted. This emphasis is needed globally, including among the more vulnerable populations in developing countries where new technology and protective measures may otherwise take many years to be adopted.”
Dr Wild’s views were amplified by the New York Times: The W.H.O. decision, the first to elevate diesel to the “known carcinogen” level, may eventually affect some American workers who are heavily exposed to exhaust. It is particularly relevant to poor countries, where trucks, generators, and farm and factory machinery routinely belch clouds of sooty smoke and fill the air with sulfurous particulates.
In addition, we in Sri Lanka now have an additional source of carcinogenic diesel fumes, the slow-moving diesel three-wheeler.
It is well known that the government of Sri Lanka subsidizes diesel to the tune of millions of rupees. It is because of these subsidies that the number of diesel-powered vehicles has increased on our roads, including the diesel-powered SUVs favored by the political class.
The latest addition is the diesel three-wheeler that not only generates noxious fumes but increases the exposure of the driver and passengers by positioning them directly in line with exhaust pipes. The protections afforded to passengers in cars with windows that can be closed are unavailable to persons in three-wheelers.
Now that the medical evidence is in, will the government take action to
(a) gradually phase out the diesel subsidy;
(b) prohibit the importation of diesel-powered three wheelers;
(c) introduce new emission standards for the diesel-powered vehicles already in the country?
Rohan Samarajiva heads LirneAsia, a regional think tank. He was also a former telecoms regulator in Sri Lanka. To read previous columns go to LBOs main navigation panel and click on the 'Choices' category.