Suggest any two policy initiatives that the government can take through the market to decrease the consumption of diesel in the country so that the environmental pollution is arrested/ checked.

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Solution

Demand for diesel can be decreased in two ways, as under:
(i) Use of Substitute Fuel (CNG): The CNG (Compressed Natural Gas) is a substitute of petrol and diesel. It is much more environment-friendly than the diesel. The government should encourage the use of CNG through subsidies.
(ii) High Taxation on Diesel Vehicles: Excise duty on the production of diesel vehicles may be raised. So that, their market price rises to curb their demand.

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