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CEP/STICERD Applications Seminars & CEP/STICERD Applications Seminars

Regulating Untaxable Externalities: Are Vehicle Air Pollution Standards Effective and Efficient?

Joe Shapiro, joint with Mark Jacobsen, Jim Sallee, Arthur van Benthem

Monday 15 November 2021 16:00 - 17:30

Many of our seminars and public events this year will continue as in person or as hybrid (online and in person) events. Please check our website listings and Twitter feed @STICERD_LSE for updates.

Unless otherwise specified, in-person seminars are open to the public.

Those unable to join the seminars in-person are welcome to participate via zoom if the event is hybrid.


About this event

What is a feasible and efficient policy to regulate air pollution from vehicles? A Pigouvian tax is technologically infeasible. Most countries instead rely on exhaust standards that limit air pollution emissions per mile for new vehicles. These standards differ from fuel economy policies. We assess the effectiveness and efficiency of these standards and counterfactual policies. We show that the emissions rate of new US vehicles has fallen by over 99 percent since standards began in 1967. Several research designs with a half century of data suggest that exhaust standards have caused most 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 majority of emissions. To study counterfactual policies, we develop analytical and quantitative models of the new and used vehicle fleets. Making ownership fees increase with the mean emissions of a vehicle type would decrease emissions and increase welfare. By contrast, current actual registration and vehicle property taxes (perversely) decrease with a vehicle's emissions.

Applications (Applied Micro) Seminars are held on Mondays in term time at 16:00-17:30 ONLINE, or in meeting room 3.05 if the speaker attends in person.

Seminar organiser: Xavier Jaravel

For further information please contact Lubala Chibwe, either by email: l.chibwe@lse.ac.uk.

Please use this link to subscribe or unsubscribe to our mailing list (applications).

Applications (Applied Micro) Seminars are held on Mondays in term time at 16:00-17:30 ONLINE, or in meeting room 3.05 if the speaker attends in person.

Seminar organiser: Xavier Jaravel

For further information please contact Lubala Chibwe, either by email: l.chibwe@lse.ac.uk.

Please use this link to subscribe or unsubscribe to our mailing list (applications).