It has been a busy start to the year on the transport front with several changes to the way the Government is taxing owners of vehicles. The changes are to encourage the ownership of less pollutive vehicles in the fight against noxious air which is the bane of many cities. Singapore has done much over the years, tightening its emission requirements and providing incentives to promote cleaner cars and commercial vehicles.

Diesel vehicles have received special attention this time. It wasn't too long ago that diesel cars were all the rage in the automotive industry. New technology had made diesel engines low-carbon emitting and with the same performance as their petrol equivalents. European buyers in particular took to them with great enthusiasm and their numbers surged, replacing petrol cars in many models. Alas, it has now been discovered that their pollutive properties have been under-stated. The problem is with the fine particulate matter (PM2.5) which diesel engines emit that is now believed to be more hazardous to health than earlier thought. The city of London, for instance, was covered in severe smog earlier this year, with extremely high levels of PM2.5. Though Singapore's air quality has not deteriorated to similar levels, there is no room for complacency as levels of sulphur dioxide and the bigger particulates (PM10) have fallen outside World Health Organisation guidelines.

The Government's response to these developments has been to change the tax on diesel, replacing a fixed lump-sum special tax with a volume-based duty at the pump. Heavy users will thus pay more, as they should. The move should discourage unnecessary use on the road and encourage more efficient planning of routes, as well as a shift to cleaner vehicles, including electric ones. Most immediately, though, the changes will likely lead to motorists switching to petrol cars. But owners of commercial vehicles have no such choice as almost all large trucks and lorries are diesel driven because of their load-carrying capabilities. Their business costs will likely increase. The Government recognises this and has announced tax rebates to offset the cost increases. The impact of these new measures on businesses will have to be closely watched, and further adjustments may have to be made down the road.

How to maintain the correct balance between the health of the economy and the healthy state of the environment? There is no perfect solution, and both competitiveness and physical well-being will require constant monitoring. It should be noted that pollution exacts hidden costs - the price paid when chronic health problems call for sustained care. There is also damage to a city's reputation for liveability and its attractiveness to tourists and businesses. For a dense city-state like Singapore, clean air is, in fact, priceless.