Higher diesel price is associated with lower level of pollution: Evidence from Vietnam

Controlling and reducing PM2.5 levels are essential, but among many studies on this topic only a few have focused on assessing the effectiveness of air pollution control policies through fuel prices. This study aims to investigate the association between higher fuel prices and PM2.5 concentrations in Vietnam. Daily data on PM2.5 in the two largest cities of Vietnam (Hanoi and Ho Chi Minh City) and prices of different fuels were collected for two years (2016-2017). A linear regression model was performed to evaluate the association between PM2.5 and fuel prices, including lag effects for up to ten days. The long term and seasonal effects on PM2.5 were controlled using a natural cubic spline function of time with three degrees of freedom per year. For every 1,000 VND increase in the price of diesel, there was a decrease of 2.7% (95% CI: -8.0, 2.7) and 13.4% (95%CI: -22.3, -4.5) in PM2.5 in Ho Chi Minh City and Hanoi, respectively. On the contrary, there was no statistically significant association between gasoline prices (both RON-95 and RON-92) and PM2.5 in both Ho Chi Minh City and Hanoi. These findings provided evidence that changes in the price of the more polluting fuel (diesel) could significantly impact the level of PM2.5 in the large cities of Vietnam. Our study offers valuable perspectives for policymakers to formulate environmental policies regarding different fuel excises.