Delhi, beware of the ‘Cobra Effect’

Delhi, beware of the ‘Cobra Effect’

In perspective

The Delhi government has announced it will reintroduce the odd-even scheme in Delhi November 4-15 to control air pollution. The scheme, first introduced in January 2016 for a fortnight and reintroduced in April 2016, was aimed at de-clogging roads and help reduce air pollution. However, the scheme was scrapped due to the controversies over exemptions granted to various categories of vehicles. The method, more commonly known as road space rationing has been implemented at different times in many cities across the world. While Beijing adopted the policy ahead of the 2008 Olympics, other cities like Rome and Bogota implemented the scheme for some time.

In Delhi’s odd-even scheme, cars with licence plates ending with odd numbers and even numbers ply on alternate days. The intention of the Kejriwal government was to address the problem of traffic congestion and air pollution in Delhi, where the air quality deteriorates especially around Diwali and due to the stubble burning in neighbouring states. The Central Pollution Control Board reported that it did not find any data to suggest that the odd-even scheme had led to any decrease in air pollution levels. The National Green Tribunal (NGT) rapped the Delhi government saying that by this scheme, the state government was encouraging people to buy more vehicles and allowing more inter-state traffic. The NGT had said, “We will not allow the odd-even vehicle rationalization scheme until you prove that it’s not counter-productive.”

Incidentally, a similar car-rationing scheme had been introduced in Mexico City in November 1989 to curb air pollution. A few studies on Mexico’s air pollution control programme had shown how the well-intentioned scheme had gone completely out of gear after implementation. The study showed that people had bought more cars to circumvent the restriction. People bought highly polluting inferior quality used cars. The air quality did not improve, and road congestion worsened. Three years later, the UN declared Mexico City the most polluted city on the planet. This is the ‘Cobra Effect’ in Economics.

In his 2001 book by the same name, German economist Horst Siebert highlighted how a well-intentioned solution to fix a problem can worsen the problem, instead of solving it, by providing perverse incentives. The ‘Cobra Effect’ recalls an anecdote from colonial India. Concerned over the increasing number of venomous cobras in Delhi, the then British government offered a reward for every dead cobra. This strategy worked initially as large numbers of snakes were killed by snake catchers to receive the bounty. However, jugaad took over. People began to breed cobras just to receive the reward. When the government became aware of this, the reward program was abolished, causing the cobra breeders to set the now-useless snakes free. As a result, the cobra population, instead of decreasing, increased. The apparent solution to the problem had made the situation even worse.

Another example of the ‘Cobra Effect’ is the Great Hanoi Rat Massacre of 1902, which has been explained in great detail by Michael G Vann in his book titled “Of Rats, Rice and Race”. Paul Doumer, the governor general of Indo-China wanted to make Hanoi a modern city with good sewers. The sewers became a breeding ground for rats and the rats became a menace. Concerned over the rat population, Doumer announced a bounty program that paid a reward for each rat killed. People had to tender the severed tail of a rat to collect the bounty. Colonial officials, however, began noticing rats in Hanoi with no tails. The Vietnamese rat catchers would capture rats, sever their tails, and then release them back into the sewers so that they could procreate and produce more rats, thereby increasing the rat catchers’ revenue.

What happened in China is worth mentioning. The “Four Pests” campaign was introduced by Mao Zedong in China in 1958, to eradicate pests which were responsible for the transmission of pestilence and disease: mosquitoes, rodents, flies and sparrows. The then Communist government had declared that birds were public animals of capitalism. What followed was shocking. The nests of sparrows were destroyed, eggs were broken, and chicks were killed. This pushed the sparrows to near-extinction. Rewards were given to those who handed in the largest number of dead flies, mosquitoes, or dead sparrows.

By April 1960, however, Chinese leaders had changed their opinion after ornithologist Tso-hsin Cheng pointed out that the sparrows not only ate grains but also ate a large number of insects. Instead of increasing, rice yields had substantially decreased after Mao’s campaign. Mao ordered the end of the campaign against sparrows as it upset the ecological balance and insects had destroyed crops because of the absence of sparrows. With no sparrows to eat them, locust population went up, swarming the country and worsening the ecological problems already caused by Mao’s other campaign, the Great Leap Forward. The ecological imbalance was responsible for the Great Chinese Famine in which millions of people died of starvation. While Mao’s intention was good, his schemes had had unintended consequences.

(The writer currently teaches at Manipal Academy of Banking, Bengaluru)