Arthur van Benthem
University of Pennsylvania
May 3, 2021 – 04:00 – 05:15 PM (CEST)
Live virtual event: please register for this talk via Zoom
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.
Arthur van Benthem is an Associate Professor of Business Economics and Public Policy at Wharton. His research specializes in environmental and energy economics. His recent work studies the unintended consequences of environmental legislation and the economic efficiency of energy policies. His current research focuses on markets for transportation, renewable energy, and oil & gas. He received his Ph.D. in Economics from Stanford University in 2012, a masters degree in Management Science & Engineering from Stanford, and his undergraduate degree from the University of Amsterdam.
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