ACDE Seminar: Fuel prices and ambient air pollution: A study of Sydney

This paper, presented by Professor Paul Burke, Head of the Arndt-Corden Department of Economics at the Crawford School of Public Policy, explores the short-run influence of road transport fuel prices on ambient air pollution over the period 2004–2023 for the case of Sydney, Australia. Using daily and monthly data from nine air quality monitoring stations, we find generally negative effects of fuel prices on ambient levels of several key pollutants, with inelastic effect sizes. Higher gasoline prices are also linked to improved daily visibility levels and a reduction in Google search interest in air pollution. Wind speeds, bushfire incidence, and public holidays are among other key factors affecting Sydney air quality. The findings are useful for air pollution prediction and add to the body of understanding of the environmental benefits of fuel taxes.