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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. We find that the main regulatory instruments used in practice are fuel economy standards, vehicle emission standards and fuel quality standards. While 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 EU or U.S. 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 (I/M) 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.

Suggested Citation

  • Timilsina, Govinda R. & Dulal, Hari B., 2009. "Regulatory instruments to control environmental externalities from the transport sector," European Transport \ Trasporti Europei, ISTIEE, Institute for the Study of Transport within the European Economic Integration, issue 41, pages 80-112.
    • Handle: RePEc:sot:journl:y:2009:i:41:p:80-112
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    4. Hala Abou- Ali & Alban Thomas, 2012. "Regulating traffic to reduce air pollution in Greater Cairo, Egypt," Chapters, in: Hala Abou-Ali (ed.), Economic Incentives and Environmental Regulation, chapter 5, pages 95-119, Edward Elgar Publishing.
    5. Barbieri, Nicolò, 2015. "Investigating the impacts of technological position and European environmental regulation on green automotive patent activity," Ecological Economics, Elsevier, vol. 117(C), pages 140-152.
    6. Perkins, Richard & Neumayer, Eric, 2012. "Does the ‘California effect’ operate across borders? trading- and investing-up in automobile emission standards," LSE Research Online Documents on Economics 42097, London School of Economics and Political Science, LSE Library.
    7. 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 and Oxford Review of Economic Policy Limited, vol. 26(2), pages 197-224, Summer.

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