Air pollution is costing advanced economies plus China and India an estimated USD 3.5 trillion a year in premature deaths and ill health and the costs will rise without government action to limit vehicle emissions, a new OECD report says.

In OECD countries, around half the cost is from road transport, with diesel vehicles producing the most harmful emissions. Traffic exhaust is a growing threat in fast-expanding cities in China and India, as the steady increase in the number of cars and trucks on the road undermines efforts to curb vehicle emissions.

“The price we pay to drive doesn’t reflect the impact of driving on the environment and on people’s health. Tackling air pollution requires collective action,” said OECD Secretary-General Angel Gurría, presenting the report at the International Transport Forum’s 2014 Summit in Leipzig, Germany (Read the full remarks).

The Cost of Air Pollution: Health Impacts of Road Transport calculates the cost to society across the OECD’s 34 members at about USD 1.7 trillion, based on the value people attach to not having their lives cut short by cancer, heart disease or respiratory problems. It puts the cost at nearly USD 1.4 trillion in China and nearly USD 0.5 trillion in India.

More than 3.5 million people die each year from outdoor air pollution. From 2005 to 2010, the death rate rose by 4 percent worldwide, by 5 percent in China and by 12 percent in India.

Deaths from outdoor air pollution by region in 2005 and 2010

The report underlines the fact that there is no public policy case for applying preferential tax treatment to diesel. It also supports taking action to reduce road transport pollution which could include tightening emission standards, expanding urban bicycle-sharing and electric car programmes and extending road charge schemes to reduce congestion.

“There is no environmental justification for taxing diesel less than petrol. Air pollution is destroying our health and the planet. Phasing out tax incentives on diesel would be a step towards reducing the costs to both and in fighting climate change,” said Gurría.

For further information, or to speak to one of the report’s authors, journalists are invited to contact the OECD Media Division on +33 1 45 24 97 00.