Getting Cars Off the Road: The Cost-Effectiveness of an Episodic Pollution Control Program

Maureen Cropper, Yi Jiang, Anna Alberini and Patrick Baur, Environmental and Resource Economics 57(1), 117-143, January .


Ground-level ozone remains a serious problem in the United States. Because ozone non-attainment is a summer problem, episodic rather than continuous controls of ozone precursors are possible. We evaluate the costs and emissions reductions of a program that requires people to buy permits to drive on high-ozone days. We estimate the demand function for permits based on a survey of 1,300 households in the Washington, DC, metropolitan area. Assuming that all vehicle owners comply with the scheme, the permit program would reduce nitrogen oxides (NOx) by 42 tons per Code Red day at a permit price of $75. Allowing for non-compliance by 15 % of respondents reduces the effectiveness of the scheme to 33 tons of NOx per day. The cost per ozone season of achieving these reductions is approximately $9 million (2008 USD). Although year-round measures, such as the Tier II emissions standards, might be preferred on benefit-cost grounds, an episodic permit system might be considered as an interim measure before the Tier II emissions standards are fully reflected in the vehicle fleet.

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