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Using Tradeable Permits to Achieve Sustainability in the World's Large Cities: Policy Design Issues and Efficiency Conditions for Controlling Vehicle Emissions, Congestion and Urban Decentralization with an Application to Mexico City

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  • HAYNES Goddard

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    Abstract

    Many large cities in the world have serious ground level ozone problems, largely the product of vehicular emissions and thus the argued unsustainability of current urban growth patterns is frequently blamed on unrestricted private vehicle use. This article reviews Mexico City's experience with vehicle use restrictions as an emissions control program and develops the conditions for optimal quantitative restrictions on vehicle use and for complementary abatement technologies. The stochastic nature of air pollution outcomes is modelled explicitly in both the static and dynamic formulations of the control problem, in which for the first time in the literature the use of tradeable vehicle use permits is proposed as a cost-effective complement to technological abatement for mobile emissions control. This control regime gives the authorities a broader and more flexible set of instruments with which to deal more effectively with vehicle emissions, and with seasonal and stochastic variation of air quality outcomes. The market in tradeable vehicle use permits would be very competitive with low transactions costs. This control policy would have very favorable impacts on air quality, vehicle congestion and on urban form and development. Given the general political resistance to environmental taxes, this program could constitute a workable and politically palatable set of policies for controlling greenhouse gas emissions from the transport sector. Copyright Kluwer Academic Publishers 1997

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    File URL: http://hdl.handle.net/10.1023/A:1026444113237
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    Bibliographic Info

    Article provided by European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.

    Volume (Year): 10 (1997)
    Issue (Month): 1 (July)
    Pages: 63-99

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    Handle: RePEc:kap:enreec:v:10:y:1997:i:1:p:63-99

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    Web page: http://www.springerlink.com/link.asp?id=100263

    Related research

    Keywords: energy and environment; urban transport; emissions trading; vehicular emissions; sustainable development; traffic control; planning and administration;

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    1. Charles W. Howe & Dwight R. Lee, 1983. "Priority Pollution Rights: Adapting Pollution Control to a Variable Environment," Land Economics, University of Wisconsin Press, vol. 59(2), pages 141-149.
    2. Eskeland, Gunnar S. & Feyzioglu, Tarhan N. & DEC, 1994. "Is demand for polluting goods manageable? an econometric study of car ownership and use in Mexico," Policy Research Working Paper Series 1309, The World Bank.
    3. Opschoor, J.B., 1994. "Institutional change and development towards sustainability," Serie Research Memoranda 0042, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
    4. Eskeland, Gunnar S, 1994. "A Presumptive Pigovian Tax: Complementing Regulation to Mimic an Emissions Fee," World Bank Economic Review, World Bank Group, vol. 8(3), pages 373-94, September.
    5. Repetto, Robert, 1987. "The policy implications of non-convex environmental damages: A smog control case study," Journal of Environmental Economics and Management, Elsevier, vol. 14(1), pages 13-29, March.
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    Cited by:
    1. Timilsina, Govinda R. & Dulal, Hari B., 2009. "A review of regulatory instruments to control environmental externalities from the transport sector," Policy Research Working Paper Series 4867, The World Bank.
    2. Yang, Hai & Wang, Xiaolei, 2011. "Managing network mobility with tradable credits," Transportation Research Part B: Methodological, Elsevier, vol. 45(3), pages 580-594, March.
    3. Alva González, Miguel Ángel, 2008. "Environmentally Unfriendly Consumption Behaviour: Theoretical and Empirical Evidence from Private Motorists in Mexico City," MPRA Paper 18019, University Library of Munich, Germany.
    4. Wang, Xiaolei & Yang, Hai & Zhu, Daoli & Li, Changmin, 2012. "Tradable travel credits for congestion management with heterogeneous users," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 48(2), pages 426-437.

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