For the past few weeks, Beijing has been clouded in an unusually thick cloud of smog. It hides the city’s monuments, it harms the citizens’ health, and it reminds us all that China’s economic miracle has its costs.

Smog is not unique to Beijing.

Across the world, big cities have unacceptably high levels of air pollution. A leading culprit for this is diesel vehicles, which are more energy-efficient than petrol-driven ones, but release more harmful nitrogen oxides (NOx) and particulates into the atmosphere.

The problem is worst in the developing world, which faces a combination of lower-grade sulphur-laden fuels, weaker emissions standards and fleets of older, more polluting vehicles.

Cutting NOx and particulate emissions for diesel engines is a challenge. Solving it would bring concrete benefits to human health around the world. Air pollution is, according to the WHO, a leading cause of death in the world.

In theory, diesel pollution should be a problem that is well on its way to being solved.

American and European Union rules on emissions have ratcheted down the allowable levels of pollution in exhaust for two decades now, while also improving the quality of diesel fuel.

These emissions standards have been widely adopted around the world. Even where they haven’t, Europe and North America’s clout in the market means that most of the big motor manufacturers build vehicles according to their standards.

Vehicles that comply with the latest Euro 6 standard have an array of high-tech equipment in them, from computer-controlled engines that maximise fuel efficiency, to diesel particulate filters that catch and burn off carbon particles and selective catalytic reduction (SCR) devices that react NOx with urea to neutralise the harmful exhaust.

Yet for all the dramatic reductions in emissions that these innovations have brought in lab tests, the emissions cuts detected in real driving conditions have been underwhelming. In the case of the Volkswagen Group, this has gone as far as rigging emissions tests using a software defeat device to temporarily cut emissions only during tests. But even in the case of the manufacturers who don’t cheat, they are designing vehicles around the narrow parameters of the tests, playing by the letter of the rules, but not their spirit.

For the older vehicles that dominate the roads in many countries, even these ineffective regulations are a moot point. There is little political will to force owners to replace their vehicles or perform expensive upgrades on them. There is no economic pressure on them to do so either - the excess pollution their vehicles cause is not their problem.

This is a classic case of market failure. There are technologies that could be adapted or improved to make diesel engines more environmentally-friendly in real driving conditions, or to cut the pollution emitted by older vehicles. The incentives have just not been put in place to encourage it.

There are technologies that could be adapted or improved to make diesel engines more environmentally friendly in real driving conditions, or to cut the pollution emitted by older vehicles. The incentives have just not been put in place to encourage it.

The Centre for Challenge Prizes has been looking at possible prizes that could promote innovation in this area.

One would be around developing a diesel engine that meets Euro 6 emissions targets in real life, rather than just in the lab.

The other would be to develop an affordable and reliable modification for older vehicles which can successfully cut the harmful NOx and particulate pollution they churn out - a prize that would be particularly valuable in the developing world.

Combined with a wider roll-out of ultra-low-sulphur fuel, and ongoing developments in electric and hybrid vehicles, these could make a big dent in urban air pollution around the world.

A century ago, London was notorious for smog every bit as disgusting as the one afflicting Beijing this week. These ‘pea soupers’ were caused by sulphurous smoke from the millions of household coal fires that kept the city warm. The most famous, the Great Smog of 1952, killed between 4,000 and 12,000 people, and finally triggered political action.

Tough regulation, in the form of the Clean Air Act of 1956 played a role. Cleaner fuels - coke and anthracite - took the place of low-grade sulphurous coal. And technological innovation, in the form of gas and electric central heating, played a starring role too.

London’s history proves that smog is not inevitable for cities. With similar innovations, the problem of diesel pollution can be cracked too.

Beijing photo by LWYang on Flickr (CC-BY)

London photo by NT Stobbs on Geograph (CC-BY-SA)