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A bird flies through the polluted sky of Tehran January 25, 2007. REUTERS/Morteza Nikoubazl (IRAN) - RTR1LLY7

When Clean Air Becomes A Luxury: The Case of Air Pollution and Climate Change in Iran

The impact of pollution and climate change on the lives of ordinary Iranians has been increasing over the last few years. As the winter season has arrived in Iran, similar to previous years the residents of Tehran and several other large Iranian cities such as Tabriz, Mashhad, and Isfahan are suffering from high levels of air pollution. In the past month alone, schools in Tehran have been closed for several days because of dangerously high levels of air pollution, while similar measures have been taken in other highly populated cities. In addition to that, the climate change induced impacts of water shortages or floods have affected the livelihoods of Iranians across the country.

The impact of climate change on Iran’s environment has taken several forms. For example, over the past decade, severe water shortages and evermore frequent dust storms have threatened the well-being of Iranians residing mainly in the center and southwest of the country. Environmental changes driven by climate change have caused the displacement of many Iranians. In some areas, water shortages have also contributed to social tensions and ethnic conflicts while also forcing thousands of farming families to migrate from rural areas to urban centers, contributing to the growth of urban slums and increase of the number of working children.

Air pollution, however, can presently be seen as the most severe of Iran’s environmental crisis. Three Iranian cities (Zabol, Boshehr, and Ahvaz) are regularly ranked among the 40 most polluted cities in the world, with Zabol listed first. In all of 2014, the air quality of Shiraz, Isfahan, Ahvaz, Tehran, Mashhad, and Tabriz were only deemed at healthy levels for 11, 11, 15, 18, 44, and 70 days out of the year respectively. About one-third of Iran’s 80-million strong population reside in these cities and their suburbs, and conditions have only since gotten worse. 70%-80% of Tehran’s air pollution is related to the transportation sector (i.e. personal cars, motorbikes, buses, taxis, trucks, and etc.). Old buses, mini-buses, and trucks account for about half this share. Economically, conservative estimates put the cost of air pollution at about $13 billion, or more than 3 percent of Iran’s GDP. Some estimates are as high as $30 billion. Most alarmingly, air pollution has been listed as the cause of premature death in over 19,600 cases.[1]

One would think that such drastic conditions would create enough motivation for the residents of these cities, as well as their officials, to come up with practical solutions for the environmental crisis facing the country and to improve the quality of air in large Iranian cities. However, for the past three decades that has not been the case, and to the contrary the overall behavior of the public and policies put forth by officials have contributed to the worsening of air pollution in these cities each year. Still, there are several efficient, fair, and effective measures that could address the environmental crisis of air pollution in large Iranian cities and climate change in the country.

One of the major contributors to air pollution in Iran are its massive energy subsidies (gasoline, diesel, natural gas, electricity). However, recent social unrest in the aftermath of the latest round of gasoline rationing and price hikes of highlight the fact that reforming energy subsidies is a highly contentious and sensitive issue in Iran that policymakers typically try to avoid for as long as possible.[2]

Therefore, a feasible proposal could be the implementation of a dynamic tolling system for personal vehicles that channels the toll proceeds toward expanding and deepening the network of a green mass transit system that operates on a combination of natural gas, electricity, or batteries. To be effective and fair, the toll amount should correlate positively on car emissions, traffic conditions, and air quality to lower environmental impacts.

Given the widespread availability of GPS and information and communication technologies (such as smart cameras and transponders) in Iran’s transit system, implementing a dynamic tolling system is technologically feasible and relatively inexpensive. Such a tolling system will reduce the number of cars on the roads, especially at times and locations within a city where levels of traffic congestion and/or air pollution are at their highest. If successful, having less cars on the road will have at least three main inter-related benefits.

The first noticeable benefit would be less time wasted in traffic. Iran ranks first in the world in terms of time wasted in traffic per adult person. An adult living in Tehran wastes around 50 minutes per day (250 hours per year) simply combatting traffic. At the country level, this means around 5 billion hours are wasted annually, costing the Iranian economy about $2 billion annually. This is compounded by the additional costs of higher stress levels, fatigue, short-temperedness, and various illnesses that could be caused by severe roadway congestion.

Second, the implementation of this system would result in less air pollution and emissions that are contributing to climate change. The transportation sector is responsible for 70% – 80% of air pollution in major Iranian cities. Therefore, reducing traffic congestion can transitively reduce air pollution. The logic is simple. If a vehicle is operating 2-3 times the amount of time it would require getting from point A to point B because of traffic, it is contributing to air pollution 2-3 times more than if there was no traffic congestion.

Finally, a dynamic tolling system would increase the efficiency of gasoline usage. In the days before the recent gasoline rationing and price hike, Iranians consumed 150 million liters of gasoline and diesel per day, equivalent to the entirety of the gasoline and diesel consumed on a given day in all of the European Union. This only shows the necessity of resolving the air pollution problem in Iran in order to reduce the impact of global climate change. About half of this amount is due to traffic congestion. Hence, less traffic congestion should directly translate into less gasoline consumption, which means less pressure on the government’s budget due to subsidies paid on gasoline and diesel. This would free up significant government resources that could then be channeled towards much needed social and environmental projects.

The proceeds of a dynamic tolling system should then be channeled towards expanding the route capacity of “green” public transportation systems, such as subways and buses operating on natural gas, electricity, or battery. This would ensure the sustainability and social acceptability of a dynamic tolling system in the long run, while also minimizing the impact on the public’s daily transit needs. In other words, the public will only embrace the tolls as long as they see noticeable reductions in pollution levels and time spent in commute. Moreover, expanding green public transportation can create new jobs in many industries, thereby reducing unemployment in Iran, a serious issue that has been facing Iran’s economy for many years, especially among the youth.

It is long overdue for relevant policymakers to let go of the decades-old inefficient and ineffective policy of “even-odd” license plate numbers and focus on figuring out the detail of how to implement a dynamic tolling system. As highlighted above, there is much to be gained, the least of which is the clearing of the air and effective long-term measures to fight climate change.


Amin Mohseni-Cheraghlou is an assistant professor in the Department of Economics at American University in Washington, D.C. He has also taught at the University of Tehran in the faculties of Economics and World Studies. His areas of expertise are Development Macroeconomics, International Political Economy, Economies of the Middle East and North Africa (MENA), and Islamic Economics and Finance. A research consultant for the World Bank Group since 2007, Amin writes frequently on topics related to development economics and economies of the Gulf and the MENA region. He holds a Ph.D. in Economics, an M.A. in International Development, and a B.S. in Electrical Engineering.

The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of Gulf International Forum.


[1] “Iran Economic Monitor, Towards Reintegration,” World Bank, Fall 2016

[2] Amin Mohseni-Cheraghlou, “Déjà vu all over again: The three “I”s of gasoline subsidies and social unrest in Iran,” MEI, November 25, 2019


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