This was 60 per cent higher than the number of deaths from motor vehicle crashes in NSW caused by speeding, alcohol and other factors.
About 21,000 significant health consequences in NSW such as hospitalisations, chronic disease and restricted activity was also attributed to vehicle emissions, the report said.
In 2005 in the latest available data, the NSW Department of Environment and Conservation estimated annual health costs of air pollution in the Sydney-Newcastle-Wollongong region at $6.9 billion.
It examined the health effects of exposure to particulate matter measuring 10 micrometres or less in diameter, known as PM10. The substances can cause allergies, infections, toxicity, respiratory illness and cancer.
About 43 per cent of PM10 exposure is due to motor vehicles. This equates to $3 billion in annual health costs in the Sydney-Newcastle-Wollongong region, or $7,100 per vehicle over a 10-year lifetime.
Vehicle air emissions disproportionately affect vulnerable people such as children and the elderly, as well as those living near busy roads.
The problem is made worse by increasing urban density that increases traffic emissions, as well as population growth and climate change-related dust storms and bush fires, the report said.
It called for new policy approaches to improve health outcomes including greater electric vehicle adoption, better public transport, stricter vehicle emission standards and a hastened transition away from polluting fossil-fuel energy generation.
Electric vehicles produce some non-exhaust emissions. However, if electric vehicles comprised 10 per cent of new car sales for a single year, 27 deaths and 910 significant health impacts would be prevented, the report concluded.
It said the NSW road toll, like other state tolls, was a “measure of effectiveness of government policy at keeping people safe on NSW roads” and deaths due to vehicle emissions should be included.
“The distinction between a death due to a car colliding with someone and a death due to a car poisoning their body is arbitrary and outdated,” the report said.
It said all NSW government fleet cars should be electrified by 2030. For general electric vehicle sales, financial incentives such as stamp duty exemptions should apply temporarily, until upfront costs of electric and traditional vehicles reach parity in about five years’ time.
The NSW government should also further support the rollout of charging infrastructure, the report said.
A Transport for NSW spokesman said the NSW government would “play a critical role in the successful adoption of electric vehicles across NSW, and are on-track to deliver against our plans”.
“We are working closely with our interstate counterparts and industry partners to deliver against our targets,” he said.
Nicole Hasham is environment and energy correspondent for The Sydney Morning Herald and The Age.