UNEP study on fiscal policies to address air pollution from road transport in cities and improve health: Insights from country experiences and lessons for Indonesia

There is growing awareness of the negative health impacts of air pollution caused by road transport in many emerging economies such as Indonesia. Governments face increasing pressure to limit harmful pollution and improve air quality in line with their commitments including under the Sustainable Development Goals (SDGs). For example, in Jakarta, a 2018 citizen’s lawsuit against the provincial and national government contended that policymakers were denying citizens the right to breathe healthy air in line with air quality standards. These developments create a window of opportunity for policy action to reduce harmful emissions. 

In response, many countries and cities have taken steps to mitigate the negative impacts of transport emissions on human health using various complementary measures including fiscal policy instruments. Policymakers are also exploring ways to exploit synergies between measures to mitigate greenhouse gas emissions and reduce emissions harmful to human health. In Jakarta, some steps have been taken to reduce harmful emissions from transport, but success has been limited to date. The potential for a comprehensive and far-reaching package of measures—including fiscal policies—to bring about tangible health benefits remains untapped. 

Against this background, this study aims to support recent efforts of the Indonesian and DKI Jakarta government to reduce air pollution. It analyses the impact of harmful pollution from the transport sector on human health in Jakarta. Reflecting on the current policy framework and challenges faced by policymakers in DKI Jakarta and drawing on international best practice, it proposes a package of green fiscal policy measures with the potential to reduce harmful emissions in the city and deliver human health benefits. Most of the proposed measures also have the potential to bring about commensurate reductions in greenhouse gas emissions as they set out to reduce private vehicle use, encourage modal shift to public transport, enhance fuel efficiency and the uptake of low-emissions vehicles. Given the similarity of the air pollution challenges faced by many cities, especially in emerging economies, the findings of the study have a wider application and many of the proposed fiscal policy measures have the potential to deliver health benefits in similar cities in South East Asia and beyond.