What is a feasible and efficient policy to regulate air pollution from vehicles? Theoretically, optimal policy would apply a Pigouvian tax on emissions. Such a tax is technologically infeasible, and most countries instead rely heavily on exhaust standards for new vehicles that limit air pollution emissions per mile, such as carbon monoxide and nitrogen oxides. This paper assesses these standards’ effectiveness and efficiency. We show that the emissions rate of new vehicles in the US has fallen by more than 99 percent since exhaust standards began in 1967. Used vehicles have had comparable declines. We show that exhaust standards have caused much of this decline. Yet exhaust standards are not cost-effective in part because they give no incentive to scrap old vehicles, which account for a large share of total emissions. To study counterfactual policies, we develop analytical and quantitative models of the new and used vehicle fleets.
Environmental, energy, and ecological problems have grown faster than their solutions. Economists have an important role to play to address these issues by using the latest science, rigorous methods and innovative policy solutions. The SWEEEP webinar series aims to convene the academic community to contribute to the scientific, economic, and policy discourses on important environmental and energy issues.
The seminar presentations are scheduled to last 60 minutes, with questions at the end.
The European Institute on Economics and the Environment is a partnership between Resources for the Future and Foundation CMCC. EIEE’s impartial economic and environmental research aims to facilitate the transition to a sustainable, inclusive society.
Contact: Professor Massimo Tavoni
The Energy Management research team at the Grenoble Ecole de Management (GEM) combines research on economics, strategic management, technology innovation and energy policy in order to create and share knowledge that will help society move towards a low-carbon future.
Contact: Professor Sébastien Houde
The ZEW – Leibniz Centre for European Economic Research is a leading German economic policy institute and a member of the Leibniz Association. ZEW's applied research aims to study and help design well-performing markets and institutions in Europe. In particular, it seeks to understand how to create a market framework that will enable the sustainable and efficient development of European economies.
Contact: Professor Sebastian Rausch
The Centre for Energy Policy and Economics (CEPE) was established in 1999 to complement the natural science and technical-oriented disciplines at ETH Zurich, by contributing to research and teaching in energy policy and economics. Through rigorous application of modern empirical methods, the goal of CEPE is to make critical contributions to the design and evaluation of energy and climate policy instruments.
Contact: Professor Massimo Filippini
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