I. Statement of problemAir pollution is a phenomenon when harmful substances including inorganic particulates and physical toxicants are released into the atmosphere that make the air toxic to breathe. Air pollution is among the greatest threats to public health, particularly in low- and middle-income countries, causing roughly 3 million deaths globally between ambient air pollution. Indoor air pollution can also be just as deadly as the ambient. In 2016, more than 6.5 million of estimated deaths (11.6% of total global deaths) were associated with indoor and ambient air pollution altogether. Of all the air-pollution-related deaths, nearly 90% of them occur in low- and middle-income countries, with approximately 2 out of 3 occurring in WHO’s South-East Asia and Western Pacific regions (WHO, 2017).Referring to the capital city of Thailand with the most condensed economic activities and the major source of pollution, Bangkok Metropolitan Region (BMR) (including the capital city and five vicinity provinces) holds more than 15 percent of the national population and over half of the country’s factories. It also ranked as the world’s 12th worst megacities with severe traffic congestion in 2016. Bangkok drivers spent an average 64.1 hours stuck in a peak hour congested traffic as of 2016, which is considerably worse than 30th in 2015, with a traffic scorecard rating of 11, down from 20 in 2015 (INRIX, 2017). Hence, the trend is considerably exacerbating and drivers wasted a lot of gasoline and fuel in a form of emission in the process, leading to air quality issues with significant health risks of other drivers, pedestrians and residences. Air pollution is generally triggered by two main causes; I) Natural causes, including dust from storm, volcanic disruption, earthquake, or wildfire smog, and II) Anthropogenic or Human-made causes; emission from fuel combustion in gas vehicles, industrial factories, or other wastes from economic activities. Nonetheless, the impact is mainly as a consequence of human causes, due to the fact that human population is increasing year by year, as a result, more economic activities and fuel combustion as needed for energy source, that create wastes and pollutants, are increasing uncontrollably which comprised of;1. Gas vehicle: It has been widely used for personal and commercial transportations and logistics in a form of car, motorcycle, semi-truck, train, and airplane, which release a lot of exhaust gases into the atmosphere. The trend is increasing as more transportation that come along with economic activities is fostered and the marginal production cost of producing each vehicle is decreasing with better technology and larger scale of production, hence, the situation becomes more severe ever since the early 20th century after its public popularity.2. Industrial factory: It has been a major source of air pollution that resulted from polluted gases and wastes emitted from the machines into the atmosphere, such as electricity generation, manufacturing industry, chemical industry, steel industry, cement industry, mining industry, etc. 3. Resource extraction process: The encroachment activities usually create unintended dust particles that spread into the atmosphere, such as rock grinding, construction, milling, explosion, etc. These emissions pose grave danger to surrounding residences and people with respiratory illnesses.4. Agricultural activities: It is typically done by conducting soil transformation and chemical uses, such as land transformation, slash-and-burn, insecticide, pesticide, etc. These activities are associated with airborne dust and hydrocarbon gases emission that mix into the atmosphere and travel for days across the region. 5. Gas evaporation: It usually happens around the area with solvent-based liquids production and oil and gas production, such as fuel gasoline, lacquer, house paint color, automotive paints, etc. Evaporation of gasoline leakage from fuel systems may make surrounding areas significantly more polluted than predicted with more than 560 kilogram/tonne of hydrocarbon evaporated into the atmosphere per year. 6. Landfill area: Garbage and waste in the landfills and waste disposal area usually filled with hazardous waste and toxicant that could contaminate the atmosphere around the area. Figure: Sizes and Composition of Particulate MatterSource: AQICN, 2017Figure: Current Bangkok’s AQI levelThailand’s air quality standards are comparatively poor when compared to WHO standards in term of PM2.5 Air Quality Index (AQI) in which it refers to airborne particulates matter smaller than 2.5 microns, particles small enough that they can be inhaled, enter the blood system and cause cancer, respiratory disease and heart disease, mostly originated from Anthropogenic, or Human-made sources such as CO2, Sulfates, Nitrates, and other organic substances. Figure: Thailand’s official AQI values and descriptionsFigure: Comparison between Thailand’s AQI mean and WHO’s recommended AQI standard means.In the first two quarters of 2017, Greenpeace Thailand monitored the AQI in 14 provinces and found that in every station recorded levels higher than the WHO recommendation of less than 10 milligrams per cubic meter of air. Bangkok, Chiang Mai, Tak, Khon Kaen and Saraburi were among the worst provinces with the highest PM2.5 levels in 2017 (Green Peace, 2017). This year the economy is expected to grow at a 3.9 percent according to the NESDB economic outlook (NESDB, 2017). So does the energy consumption, it would generally increase in line with the economic growth.Figure: Final Energy Consumption by Economic Sectors 2016Source: EPPO, 2017As of 2017, petroleum products or oil are accounted for 54% of total final energy consumption in Thailand, while electricity, natural gas, coal and lignite accounted for 21%, 12%, 12% and 0.4% respectively. Electricity is generated mainly through thermal generation method which mostly uses natural gas than other fuels. Natural gas accounts for 67% and coal and lignite for 18% of the fuel used for electricity generation; 8% from imports; and the rest of 7.5% is derived from hydropower, oil, renewable sources and other sources. Of Thailand’s total final energy consumption, the transportation sector is the largest energy consuming sector accounting for 37% in 2017. The second largest energy consumer is the industry sector accounting for 36%. Since majority of 94.84% of car nowadays still use “oil” (including gasoline and diesel products) as the main source of fuel to run their engines (Department of Land Transport, 2016), the root causes of the problem may constitute around the use of vehicle and its consequences from fuel consumption. Accordingly, traffic congestion has been the main source of air pollution in Bangkok, which reached critical levels in the 1990s. However, the efforts of government to improve air quality by regulating on fuel quality and enforcing emission standards on vehicle manufacturers have been tremendously successful as the atmospheric particulate matter levels significantly dropped from 81 micrograms per cubic metre in 1997 to 43 in 2007 (Fuller, 2007).II. Problem Assessment & AnalysisThe air pollution problem in Bangkok is empirically addressed by the following; Growing vehicle population; Create traffic congestion problemInefficient fuel emission: Large number of old and long life usages engineLarge share of motorcycles, High emission rate due to low fuel efficiencyFirst car buyer program; Large inflow of new car populationLack of Public Transportation Integration: Less willingness to utilize the system of public transportation.Growing vehicle population & traffic congestion problemThe cumulative vehicle population registered in Bangkok still grows by about 6.19% per year (from 4,288,468 in 2004 to 9,363,588 in 2016), whereas in national level, the cumulative vehicle population growth is about 4.67% per year (from 20,624,719 in 2004 to 37,338,139 in 2016). The vehicle fleet in Bangkok consists mostly of motorcycles (56.13%), personal vehicle (22.69%), light duty vehicles (17.38%), and heavy duty vehicles (1.17%) (Department of Land Transport, 2016). Thus, the trend of people owning car is increasing at a higher rate in Bangkok than for nation-wide, and more than half of the people use motorcycle.Figure: Thailand’s New Car registration & its trendSource: Department of Land Transportation, 2017In 2016, Bangkok drivers spent an average 64.1 hours stuck in a peak hour congested traffic.Also, the lack of efficient traffic control and the bad driving habits of Bangkok residents also contribute to traffic congestion.Inefficient fuel emission There are two key contributing factors to the in inefficient fuel emissionUnregulated automotive industry; since there’s no limit on the number of cars on the road, that causes an excess demand of road surface.Unregulated automotive maintenance regulation; Older vehicles are not as environmentally friendly as newer vehicles but a large number are still in use, with very little enforcement on emitted toxic level of pollution. Car Taxi MotorcycleFigure: Percentage of vehicles in which the engines emitted beyond standard level of CO Source: Pollution Control Department, 2017Large share of motorcyclesSurprisingly, according to a research by Greenspace, “Motorcycles were indeed more fuel-efficient than cars and emitted less of the greenhouse gas carbon dioxide, but they emitted far more smog-forming hydrocarbons and oxides of nitrogen, as well as the toxic air pollutant carbon monoxide. For the most recent model year vehicles tested — from the ’00s — the motorcycle used 28% less fuel than the comparable decade car and emitted 30% fewer carbon dioxide emissions, but it emitted 416% more hydrocarbons, 3,220% more oxides of nitrogen and 8,065% more carbon monoxide.” (Greenspace, 2011). Hence, with higher in numbers and rate of emission, motorcycles may be a major source of pollution in Bangkok as vehicle that government should pay closer attention on regulating these vehicles.Figure: New vehicle registration by types of vehiclesFigure: GHG Emission measured from vehicles and each occupancy Source: ESMAP, 2003First car buyer programDespite facing with air pollution caused by traffic congestion that is ranked top ten in the world, the Thai government launched a tax refund policy for first time car buyers between September 16, 2011 and December 31, 2012 aiming to stimulate the economy with spending by giving an opportunity to low-to-middle income people to own their first car with discounted price of 150,000 THB as a tax subsidy. Although past studies evaluated the impact of the program on several aspects, the environment aspect has been ignored (Attavanich, 2017).Figure: Annual Total Environmental Cost of Air Pollution from the First car buyer program, calculated from WTP for Air Quality As a result of the program, there are a large number of cars added to the limited road system in Bangkok, at the end of the program in 2012 of 1.26 million cars registered to the program, worsening the traffic congestion and air quality., worth the value of estimated total environmental cost of $6.173 billion dollar annually, that can be economically explained by the above chart..Lack of Public Transportation IntegrationThe lack of efficient public transport systems due to lack of integration on coordinating investment between BTS and MRT providers, and overall quality of service and route plan of public buses that provided by BMTA are the root causes of low tendency to use public transportation in Bangkok. Surprisingly, only 40% of all daily trips in Bangkok use public transport system, and only 4% of trips utilize the mass rapid transit (MRT) rail systems, as BTS and MRT. Undoubtedly, most transport trips for Bangkok involve four- and two-wheels, including Car, Taxi, Motorcycle, and Van; more than 46% of the total trips (ADB, 2016).III. Impact Analysis The impact from the air pollution problems have been experienced and noticed by economists and environmentalists as followed;Externality Cost on public road Health & Mortality ImpactExternality Cost on public road Figure: Economics Illustration of Externally from public road exploitation; in term of traffic flow in relation to the social externality cost from the traffic congestion. Generally known for the biggest issue of Bangkok, traffic congestion is a general routine of Bangkok’s drivers to be wasting time and cost of fuels on the jammed streets, especially during the rush hours. This phenomenon can be explained by economic principle as market failure of imbalance between demand and supply of road in term of traffic flow and negative externality cost on publics. Since the private consumers typically concern for their interest as reflect in their consumption to maximize their utility, as the quantity F* on the chart. At F*, it creates an excess demand of the road that overflow the limited road space imposing an externality cost, as the area ABC on the chart. On the other hand, the socially optimal level of traffic flow or consumption have to be at F0 that is the private consumer may need to externalize the externality from driving a car that caused traffic congestion. Health & Mortality Impact Increasing economic activity in and around the Bangkok Metropolitan Region (BMR) has been a predominant force in Thailand’s growth over the past 30 years. The BMR comprises Bangkok City and its five surrounding provinces. Over 15 million people live in this region, with 5.7 million living in the City of Bangkok alone. The population and transportation sector increase with rapid economic growth have raised concerns for acute air pollution in Bangkok. The air pollution in Bangkok is categorized as “unhealthy” with regard to Air Quality Index (AQI), with concentration levels reaching up to two times the ambient air standard of WHO. Particulate matter, especially the very fine particles of 2.5 microns, is a major health threat to the Bangkok Urban population, for when inhaled, it can cause a range of cancers, respiratory, and neurological diseases. According to the study, all air pollutants have significant short-term impacts on non-accidental mortality. An increase of 10??g/m3 in PM10, 10?ppb in O3, 1?ppb in SO2 were associated with a 0.40% (95% posterior interval (PI): 0.22, 0.59%), 0.78% (95% PI: 0.20, 1.35%) and 0.34% (95% PI: 0.17, 0.50%) increase of non-accidental mortality, respectively. O3 air pollution is significantly associated with cardiovascular mortality, while PM10 is significantly related to respiratory mortality (Guo et. al., 2014)Moreover, to re-emphasize on the impact on population’s health, the study on the Mortality Effects of Particulate Matter in Bangkok by Vichit-Vadakan, Vajanapoom, and Ostro, from 1 January 1999 to 31 December 2003, has shown that there was an average of 95 deaths per day from non-accidental mortality; with about 8% and 14% of the total consisted of mortality from respiratory and cardiovascular diseases, respectively, and about half of the total deaths were among those ? 65 years of age (Vichit-Vadakan, Vajanapoom, and Ostro, 2008). IV. Policy Recommendations In an environmental economics context, the air pollution problems may resulted from the imbalance between costs and benefits of environmental damage, private cost, and social cost of economics activities. It also reflects a combination of market failures and government failures that government interventions distort the market by influencing prices and/or quantities through taxes, quotas, or subsidies at the wrong and inefficient level due to asymmetric information problem in cap-and-trade. Market failures arise when critical factors remain outside its domain of consideration of individual or business, that is the environmental resources are widely exploited without property rights enforcement and internalization of externality cost into production, particularly in transportation activities that require the use of gases vehicle. There are a number of aspects within which air pollution reduction can be assessed. For simplicity, a solution to reduce urban air pollution can be disaggregated into three factors:I. Emissions per unit of fuel: Increase Fuel Efficiency on in-use vehicleCompulsory standard for fuel consumption; for newly manufactured cars in Thailand, the Euro 4 emission stand should be replaced by a higher standard up to the most-up-to-date Euro 6 standard level in order to increase restriction on environmentally friendly vehicle.Age Limits of Vehicle; especially Taxi, Trucks, and Buses, since large number of these vehicle emit more pollutant of CO, and NO than an average car of the same size, due to the heavy-use of these vehicle as a public transportation to earn money which typically more than 15 hours a days.II. Total transport services demanded: Promote public transportationPublic transportation investment and reform: The need of BMTA Reform & Ticketing System is potentially targeted as the major change of Thai public transportation, particularly for the majority of the passenger of low-middle income group of population who would be the most affected by such improvement. The reform can be done by rearranging the route to be more efficient, improving the bus stop and information system for timing and navigating service. In addition, the integrated ticketing system of e-ticket that can be used in any form of public transportation may increase convenience, thus, attract more passengers to use public transportation services as a whole.Urban Rail Service Integration: BTS and MRT Joint Venture should create a stronger integration of a mass transit system of inner Bangkok, and hopefully Outer Bangkok, that would potentially reduce a demand for private transportation by consolidating the transport fleet into fewer public vehicle with higher occupancy per vehicle or trip, as trains or buses.Fuel and Road pricing measures: The pricing and taxation on the fuel and the road usage frequency may be the indirect de-incentives for population to use less private car and utilization of road to reduce traffic with certain pricing. Reduction of Fuel Subsidy: particularly on the most polluted fuel as Diesel & LPG, since they has been mainly used by commercial and heavy-use vehicle that by reducing the subsidy would raise the price, hence, lower demand and usages.III. Fuel consumption per unit of transport service: Promote energy efficient vehicle, fuel combustion system, or facilities for more energy efficient way of transportThe Use of Alternative Fuels & Fuel Switching: Hybrid & EV Vehicle should be promoted as the alternative vehicle to the gases vehicle. Furthermore, Thailand, as a manufacturing base for automotive industry, should leverage this competitive advantage to revolutionize as an initiator of Hybrid and EV vehicle in Thailand, and other countries.Subsidization of High Energy Efficiency Vehicles: Tax Promotion can be given to the taxpayer who adopt High Energy Efficiency Vehicles by reducing the cost of purchasing new car with more environmentally friendly car.Biking Infrastructure: Sky Lane & Supporting Facilities may encourage to people to use more of bicycle from benefis of safety, convenience, and facilities for them to maintenance and easily use the bicycle. All in all, unless Thai government starts to regulate strictly and treatment facilities are provided, air pollution issue and environmental contamination in Bangkok caused by emission, hazardous waste and toxic gases from urban transport as car, motorcycle, and all other vehicles will potentially threaten to become Bangkok’s most critical environmental problem for the major urban areas in the future. Therefore, the government intervention as protective policy and solutions may need to address and resolve these issues to the root causes at the top of the streams, not the end of the stream, as soon as possible.