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A review of regulatory instruments to control environmental externalities from the transport sector

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  • Timilsina, Govinda R.
  • Dulal, Hari B.

Abstract

This study reviews regulatory instruments designed to reduce environmental externalities from the transport sector. The study finds that the main regulatory instruments used in practice are fuel economy standards, vehicle emission standards, and fuel quality standards. Although industrialized countries have introduced all three standards with strong enforcement mechanisms, most developing countries have yet to introduce fuel economy standards. The emission standards introduced by many developing countries to control local air pollutants follow either the European Union or United States standards. Fuel quality standards, particularly for gasoline and diesel, have been introduced in many countries mandating 2 to 10 percent blending of biofuels, 10 to 50 times reduction of sulfur from 1996 levels, and banning lead contents. Although inspection and maintenance programs are in place in both industrialized and developing countries to enforce regulatory standards, these programs have faced several challenges in developing countries due to a lack of resources. The study also highlights several factors affecting the selection of regulatory instruments, such as countries'environmental priorities and institutional capacities.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 4867.

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Date of creation: 01 Mar 2009
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Handle: RePEc:wbk:wbrwps:4867

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Keywords: Transport Economics Policy&Planning; Transport and Environment; Energy Production and Transportation; Environmental Economics&Policies; Environment and Energy Efficiency;

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References

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  1. Thomas N. Hubbard, 1997. "Using Inspection And Maintenance Programs To Regulate Vehicle Emissions," Contemporary Economic Policy, Western Economic Association International, vol. 15(2), pages 52-62, 04.
  2. Bonnel, Patrick, 1995. "Urban car policy in Europe," Transport Policy, Elsevier, vol. 2(2), pages 83-95, April.
  3. A. Greening, Lorna & Greene, David L. & Difiglio, Carmen, 2000. "Energy efficiency and consumption -- the rebound effect -- a survey," Energy Policy, Elsevier, Elsevier, vol. 28(6-7), pages 389-401, June.
  4. Bezdek, Roger H. & Wendling, Robert M., 2005. "Potential long-term impacts of changes in US vehicle fuel efficiency standards," Energy Policy, Elsevier, Elsevier, vol. 33(3), pages 407-419, February.
  5. Fischer, Carolyn, 2008. "Comparing flexibility mechanisms for fuel economy standards," Energy Policy, Elsevier, Elsevier, vol. 36(8), pages 3106-3114, August.
  6. Greene, David L, 1998. "Why CAFE worked," Energy Policy, Elsevier, Elsevier, vol. 26(8), pages 595-613, July.
  7. Eskeland, Gunnar S. & Feyzioglu, Tarhan, 1995. "Rationing can backfire : the day without a car in Mexico City," Policy Research Working Paper Series 1554, The World Bank.
  8. HAYNES Goddard, 1997. "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 w," Environmental & Resource Economics, European Association of Environmental and Resource Economists, European Association of Environmental and Resource Economists, vol. 10(1), pages 63-99, July.
  9. Greene, David L, 1991. "Short-run Pricing Strategies to Increase Corporate Average Fuel Economy," Economic Inquiry, Western Economic Association International, Western Economic Association International, vol. 29(1), pages 101-14, January.
  10. de Palma, Andre & Kilani, Moez, 2008. "Regulation in the automobile industry," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 26(1), pages 150-167, January.
  11. Robert W. Crandall, 1992. "Policy Watch: Corporate Average Fuel Economy Standards," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 6(2), pages 171-180, Spring.
  12. Dowlatabadi, Hadi & Lave, Lester B & Russell, Armistead G, 1996. "A free lunch at higher CAFE? A review of economic, environmental and social benefits," Energy Policy, Elsevier, Elsevier, vol. 24(3), pages 253-264, March.
  13. Eskeland, Gunnar S, 1994. "A Presumptive Pigovian Tax: Complementing Regulation to Mimic an Emissions Fee," World Bank Economic Review, World Bank Group, World Bank Group, vol. 8(3), pages 373-94, September.
  14. Harrington, Winston, 1997. "Fuel Economy and Motor Vehicle Emissions," Journal of Environmental Economics and Management, Elsevier, vol. 33(3), pages 240-252, July.
  15. Austin, David & Dinan, Terry, 2005. "Clearing the air: The costs and consequences of higher CAFE standards and increased gasoline taxes," Journal of Environmental Economics and Management, Elsevier, vol. 50(3), pages 562-582, November.
  16. Goldberg, Pinelopi Koujianou, 1998. "The Effects of the Corporate Average Fuel Efficiency Standards in the US," Journal of Industrial Economics, Wiley Blackwell, Wiley Blackwell, vol. 46(1), pages 1-33, March.
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Citations

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Cited by:
  1. Blackman, Allen & Osakwe, Rebecca & Alpizar, Francisco, 2010. "Fuel tax incidence in developing countries: The case of Costa Rica," Energy Policy, Elsevier, Elsevier, vol. 38(5), pages 2208-2215, May.
  2. Richard Perkins & Eric Neumayer, 2012. "Does the ‘California effect’ operate across borders? trading- and investing-up in automobile emission standards," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 42097, London School of Economics and Political Science, LSE Library.
  3. David Anthoff & Robert Hahn, 2010. "Government failure and market failure: on the inefficiency of environmental and energy policy," Oxford Review of Economic Policy, Oxford University Press, Oxford University Press, vol. 26(2), pages 197-224, Summer.

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