The Comparison and ranking of policies for abating mobile-source emissions

Abstract Mobile-source emissions represent a large portion of all air pollutants, especially in urban areas. While there exist many forms of vehicle emissions abatement policies and others have been proposed, formal measures and methods for assessing the relative efficiency and effectiveness of these alternatives are needed. This is particularly the case given the fact that the methods of externality-control most favored by economics (effluent or Pigouvian charges, or the direct taxing of pollutant volume) are generally not feasible for vehicle emissions. In many cases, vehicle pollution control belongs to the realm of the search for the ‘best among the second-best’ policy alternatives. In this paper the range of policy alternatives used for controlling vehicle emissions is reviewed. A formal methodology for assessing the relative efficiency of alternative policies is proposed, with formal measures that lend themselves to relatively easy quantification for empirical application. It is shown that the most important components of these efficiency assessments are the elasticity of emissions with respect to the ‘travel activity’ taxed or subsidized by an abatement policy (such as fuel taxes, vehicle taxes, subsidies for public transit, etc.), the impact of the policy upon travel consumer surplus, and the ‘noisiness’ or the stochastic uncertainty of the relationship between the emissions level and the ‘activity’ being taxed or subsidized. This last factor makes the abatement policy ‘noisier’ and less efficient.