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

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.