Economic assessment and Policies on controlling air pollution due to Transportation: Case study of Tehran

The air pollution which is at present on of the most important problems in the city of Tehran, as an externality, imposes costs and expenses on the economy of the country. These costs which are sometimes unaccountable while add to the environmental issues in the long – run and aggravate the circumstances in accessing to sustainable development. So, by controlling and reducing the air pollution the necessary grounds for creating appropriate and suitable conditions for growth and development should be prepared. Controlling the air pollution can be assessed in two directions (pivotal stages). First, posing rules and controls by the policymakers and second, setting environmental taxes. Using the estimations by the model which analysis the air pollution resulted from transportation in Tehran, we conclude that the distance demand is a less elastic factor (good) which is due to the low price of gas in Tehran. The findings of the estimations after setting (posing) environmental taxes (taxes on the price of gas and distance plus taxes on vehicles) also, indicate that considering the less elasticity of the driven distance demand, setting these types of taxes is merely useful for the income purposes of the government, while, pigovian purposes, that is, reducing the air pollution through reducing demand by consumers Will not be satisfactory via posing these types of taxes.