Carbon Prices and Automobile Greenhouse Gas Emissions: The Extensive and Intensive Margins
AbstractThe transportation sector accounts for nearly one third of the United States' greenhouse gas emissions. While over the past number of decades, policy makers have avoided directly pricing the externalities from vehicles, both in terms of global and more local pollutants and Corporate Average Fuel Standards have changed little since the mid-1980s, there is now considerable interest in reducing greenhouse gas emissions form the transportation sector. Many have argued that the unique features of the sector imply that pricing mechanisms would have little affect on emissions. This paper analyzes how pricing carbon through either a cap and trade system or carbon tax might affect greenhouse gas emissions from the transportation sector by estimating how changes in gasoline prices alter consumer behavior. We analyze their effect on both the intensive (e.g., vehicle miles travelled) and extensive (e.g., vehicle scrapping) margins. We find large effects on both margins.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 16482.
Date of creation: Oct 2010
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Other versions of this item:
- Christopher R. Knittel & Ryan Sandler, 2011. "Carbon Prices and Automobile Greenhouse Gas Emissions: The Extensive and Intensive Margins," NBER Chapters, in: The Design and Implementation of U.S. Climate Policy, pages 287-299 National Bureau of Economic Research, Inc.
- L0 - Industrial Organization - - General
- Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-10-30 (All new papers)
- NEP-ENE-2010-10-30 (Energy Economics)
- NEP-ENV-2010-10-30 (Environmental Economics)
- NEP-REG-2010-10-30 (Regulation)
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