The High Cost of Dirty Roads: Why Developing Nations Must Rethink Vehicle Policies

In a groundbreaking collaboration, the World Bank Group, Global Road Safety Facility (GRSF), TRL Limited, and Integrated Transport Planning have released a pivotal report titled “Safe and Clean Vehicles for Healthier and More Productive Societies.” Drawing on cutting-edge modeling, global health data, and transport economics, the study tackles the twin crises of unsafe and polluting vehicles in emerging and developing economies. It argues that improving motor vehicle safety and emissions standards is not only an environmental imperative but a central component of the human capital agenda, critical to safeguarding public health, enhancing productivity, and accelerating inclusive growth. This is not just a transportation issue, but a silent pandemic that affects every sector of development.

Unsafe Roads and Dirty Air: A Mounting Human and Economic Crisis

Globally, road crashes claim an estimated 1.19 million lives annually, while emissions from road transport are responsible for another 550,000 premature deaths. The situation is most dire in low- and middle-income countries, where more than 90 percent of these fatalities occur despite owning just 60 percent of the global vehicle fleet. The economic toll is staggering. Road crashes alone cost the world $2.9 trillion per year, while the health effects of PM2.5 and NO₂ emissions from vehicles add another $805 billion in welfare losses. Children are particularly vulnerable, with exposure to fine particulate matter (PM2.5) causing the loss of 64 million IQ points in 2021, a hit to future productivity valued at $157 billion. When added up, the total annual cost of motorization-related health impacts represents a significant drag on GDP across developing economies, particularly in regions like South Asia, East Asia, and Latin America.

Reforming the Fleet: Why Scrapping Old Vehicles Beats Polishing New Ones

One of the report’s central findings is that targeting only new vehicles with stricter safety and emissions rules is ineffective if older vehicles are allowed to remain in service. Most gains in reducing pollution and traffic fatalities come from retiring old, non-roadworthy vehicles and regulating used vehicle imports. In countries such as Ghana, Kazakhstan, and Lao PDR, the safety benefits were up to 35 times greater when standards were extended to both imported used vehicles and existing fleets. This is especially relevant given that, in 2018, 70 percent of emerging economies imported more used vehicles than new ones, and in many cases, those imports were outdated and lacked essential safety or emissions features. Without proper scrappage policies, inspections, and retrofits like diesel particulate filters (DPFs) or selective catalytic reduction (SCR) systems, these vehicles pose a long-term health hazard. Simply put, upgrading the old fleet delivers bigger and faster wins than waiting for cleaner new vehicles to populate the roads.

Not All Electric Vehicles Are Created Equal

Electric vehicles (EVs) are often hailed as a climate solution, and while they eliminate tailpipe emissions, the report tempers this optimism. In countries like Egypt and Mexico, electrification alone delivered fewer short-term health benefits than leapfrogging from Euro 4 to Euro 6 emissions standards. That’s because EVs frequently enter the fleet as additions, not replacements, for dirty, diesel-fueled vehicles that continue to pollute at high rates. Even worse, EVs are heavier and may cause more severe accidents, especially involving pedestrians. Non-exhaust emissions from EVs, like brake and tire wear, also contribute heavily to PM2.5 and include toxic metals such as cadmium and lead. The informal recycling of lead-acid batteries, especially in two- and three-wheelers, is another grave concern. Globally, lead exposure results in 5.5 million cardiovascular deaths and costs 765 million IQ points annually. Thus, a standalone EV push without parallel policies for fleet retirement, emissions control, and battery regulation risks becoming a half-measure.

Trade Policies, NO₂, and the Urgent Need for Leapfrogging

The report strongly cautions against trade policies that allow lightly regulated used vehicle imports under the guise of affordability. Such practices often backfire. In Ghana, including used vehicles in import mandates nearly doubled the reduction in PM2.5 and NOx emissions. Countries are urged to abandon outdated age-based restrictions in favor of performance-based entry criteria, supported by inspection protocols in both exporting and importing countries. New Zealand’s two-stage system is presented as a model. The study also shines a light on a long-overlooked pollutant: nitrogen dioxide (NO₂). In upper-middle-income countries like Brazil and Mexico, NO₂-related deaths now exceed those from PM2.5. Globally, road-transport NO₂ emissions cost $420 billion in 2021, about 0.44 percent of global GDP. In Latin America, the figure rises to 1.36 times the cost of PM2.5-related deaths. This trend, amplified by rising motorization, calls for bold policies that leapfrog outdated standards. The data shows that switching from Euro 4 to Euro 6 provides three to sixteen times greater NO₂ reductions than incremental changes.

The report concludes that safer, cleaner vehicles are achievable only through a comprehensive motorization management strategy. This includes regulating vehicles across their entire lifecycle, from import to retirement, while synchronizing emissions standards with fuel quality regulations and public transit investments. It urges policymakers to integrate transport safety and environmental policy with broader economic planning, treating it as a health, trade, energy, and urban development issue all at once. With strong governance, clear standards, regular vehicle inspections, and smarter trade regulations, emerging economies can seize a transformative opportunity: to save lives, improve air quality, unlock productivity, and drive equitable growth in the decades ahead.