IDEAS home Printed from https://ideas.repec.org/p/cdl/uctcwp/qt3rb1472g.html
   My bibliography  Save this paper

An Emission Saved is an Emission Earned: An Empirical Study of Emission Banking for Light-Duty Vehicle Manufacturers

Author

Listed:
  • Rubin, Jonathan D.
  • Kling, Catherine

Abstract

This paper presents results of an empirical study of emission banking for light-duty vehicle manufacturers. An intertemporal model of manufacturers' choices is combined with econometrically estimated abatement cost functions to simulate the cost savings and emission effects of an averaging, trading, and banking marketable permit system relative to command-and-control regulations. While the cost savings of such a system are estimated to be modest, the intertemporal emission effects may be sizable. The sensitivity of the results to discount rates, abatement cost functions, and model specifications is also explored.

Suggested Citation

  • Rubin, Jonathan D. & Kling, Catherine, 1993. "An Emission Saved is an Emission Earned: An Empirical Study of Emission Banking for Light-Duty Vehicle Manufacturers," University of California Transportation Center, Working Papers qt3rb1472g, University of California Transportation Center.
    • Handle: RePEc:cdl:uctcwp:qt3rb1472g
    as

    Download full text from publisher

    File URL: https://www.escholarship.org/uc/item/3rb1472g.pdf;origin=repeccitec
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Cropper, Maureen L & Oates, Wallace E, 1992. "Environmental Economics: A Survey," Journal of Economic Literature, American Economic Association, vol. 30(2), pages 675-740, June.
    2. Hahn, Robert W & Axtell, Robert L, 1995. "Reevaluating the Relationship between Transferable Property Rights and Command-and-Control Regulation," Journal of Regulatory Economics, Springer, vol. 8(2), pages 125-148, September.
    3. Carmen Difglio & K.G. Duleep & David L. Green, 1990. "Cost Effectiveness of Future Fuel Economy Improvements," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 65-86.
    4. Maloney, Michael T. & Yandle, Bruce, 1984. "Estimation of the cost of air pollution control regulation," Journal of Environmental Economics and Management, Elsevier, vol. 11(3), pages 244-263, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Solomon, Barry D., 1999. "New directions in emissions trading: the potential contribution of new institutional economics," Ecological Economics, Elsevier, vol. 30(3), pages 371-387, September.
    2. Feng, Hongli & Zhao, Jinhua, 2006. "Alternative intertemporal permit trading regimes with stochastic abatement costs," Resource and Energy Economics, Elsevier, vol. 28(1), pages 24-40, January.
    3. Richard Newell & William Pizer & Jiangfeng Zhang, 2005. "Managing Permit Markets to Stabilize Prices," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 31(2), pages 133-157, June.
    4. Kling, Catherine & Rubin, Jonathan, 1997. "Bankable permits for the control of environmental pollution," Journal of Public Economics, Elsevier, vol. 64(1), pages 101-115, April.
    5. Schwabe, Kurt A., 1999. "The effects of separability on incentive-based instrument performance," Economics Letters, Elsevier, vol. 63(3), pages 377-380, June.
    6. Charles Raux, 2002. "The Use of Transferable Permits in the Transport Sector," Post-Print halshs-00080454, HAL.
    7. Robert W. Hahn, 1995. "Choosing among fuels and technologies for cleaning up the air," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 14(4), pages 532-554.
    8. Schennach, Susanne M., 2000. "The Economics of Pollution Permit Banking in the Context of Title IV of the 1990 Clean Air Act Amendments," Journal of Environmental Economics and Management, Elsevier, vol. 40(3), pages 189-210, November.
    9. A.Denny Ellerman & Juan-Pablo Montero, 2007. "The Efficiency and Robustness of Allowance Banking in the U.S. Acid Rain Program," The Energy Journal, , vol. 28(4), pages 47-72, October.
    10. Li, Shoude, 2014. "Dynamic optimal control of pollution abatement under emissions permit banking," Economic Modelling, Elsevier, vol. 36(C), pages 363-369.
    11. Considine, Timothy J. & Larson, Donald F., 2006. "The environment as a factor of production," Journal of Environmental Economics and Management, Elsevier, vol. 52(3), pages 645-662, November.
    12. Innes, Robert, 2003. "Stochastic pollution, costly sanctions, and optimality of emission permit banking," Journal of Environmental Economics and Management, Elsevier, vol. 45(3), pages 546-568, May.
    13. Denny Ellerman & Vanessa Valero & Aleksandar Zaklan, 2015. "An Analysis of Allowance Banking in the EU ETS," RSCAS Working Papers 2015/29, European University Institute.
    14. Daniel Phaneuf & Till Requate, 2002. "Incentives for Investment in Advanced Pollution Abatement Technology in Emission Permit Markets with Banking," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 22(3), pages 369-390, July.
    15. Speir, Cameron & Stephenson, Kurt & Shabman, Leonard A., 2000. "Command-And-Control Or Effluent Allowance Markets: Roles Of Economic Analysis," 2000 Annual meeting, July 30-August 2, Tampa, FL 21869, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    16. Rubin, Jonathan & Leiby, Paul N. & Greene, David L., 2009. "Tradable fuel economy credits: Competition and oligopoly," Journal of Environmental Economics and Management, Elsevier, vol. 58(3), pages 315-328, November.
    17. Ellerman, A.D. & Juan-Pablo Montero, 2002. "The Temporal Efficiency of SO2 Emissions Trading," Cambridge Working Papers in Economics 0231, Faculty of Economics, University of Cambridge.
    18. Schwabe, Kurt A., 2000. "Modeling state-level water quality management: the case of the Neuse River Basin," Resource and Energy Economics, Elsevier, vol. 22(1), pages 37-62, January.
    19. Tietenberg, Tom, 1998. "Ethical influences on the evolution of the US tradable permit approach to air pollution control," Ecological Economics, Elsevier, vol. 24(2-3), pages 241-257, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Paul Lanoie & Benoît Laplante & Georges A. Tanguay, 1994. "La firme et l’environnement," L'Actualité Economique, Société Canadienne de Science Economique, vol. 70(2), pages 97-111.
    2. Revesz, Richard & Stavins, Robert, 2004. "Environmental Law and Policy," Working Paper Series rwp04-023, Harvard University, John F. Kennedy School of Government.
    3. Fankhauser, Samuel & Hepburn, Cameron, 2010. "Designing carbon markets. Part I: Carbon markets in time," Energy Policy, Elsevier, vol. 38(8), pages 4363-4370, August.
    4. Juin‐Jen Chang & Jhy‐Hwa Chen & Jhy‐Yuan Shieh & Ching‐Chong Lai, 2009. "Optimal Tax Policy, Market Imperfections, and Environmental Externalities in a Dynamic Optimizing Macro Model," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 11(4), pages 623-651, August.
    5. Murty, Sushama & Russell, R. Robert, 2010. "On modeling pollution-generating technologies," Economic Research Papers 271176, University of Warwick - Department of Economics.
    6. Frans P. Vries & Nick Hanley, 2016. "Incentive-Based Policy Design for Pollution Control and Biodiversity Conservation: A Review," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 63(4), pages 687-702, April.
    7. Khanna, Neha, 2013. "Output, emissions, and technology: Some thoughts," Economics Letters, Elsevier, vol. 118(2), pages 284-286.
    8. Armin Schmutzler, 1996. "Pollution control with imperfectly observable emissions," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 7(3), pages 251-262, April.
    9. Zhou, Guanghui & Chung, William & Zhang, Xiliang, 2013. "A study of carbon dioxide emissions performance of China's transport sector," Energy, Elsevier, vol. 50(C), pages 302-314.
    10. Inés Macho-Stadler, 2008. "Environmental regulation: choice of instruments under imperfect compliance," Spanish Economic Review, Springer;Spanish Economic Association, vol. 10(1), pages 1-21, March.
    11. Yu-Bong Lai, 2003. "Interest Groups, Economic Competition, and Endogenous Public Policy," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 159(2), pages 342-361, June.
    12. Eskeland, Gunnar S. & Mideksa, Torben K., 2008. "Transportation fuel use, technology and standards: The role of credibility and expectations," Policy Research Working Paper Series 4695, The World Bank.
    13. Andrea Baranzini & José V. Ramirez & Caroline Schaerer & Philippe Thalmann, 2008. "Introduction to this Volume: Applying Hedonics in the Swiss Housing Markets," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 144(IV), pages 543-559, December.
    14. Amitrajeet Batabyal, 1996. "Consistency and optimality in a dynamic game of pollution control I: Competition," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 8(2), pages 205-220, September.
    15. Richard Bennett, 1995. "The Value Of Farm Animal Welfare," Journal of Agricultural Economics, Wiley Blackwell, vol. 46(1), pages 46-60, January.
    16. Don Fullerton & Gilbert E. Metcalf, 2002. "Environmental Controls, Scarcity Rents, and Pre-existing Distortions," Chapters, in: Lawrence H. Goulder (ed.), Environmental Policy Making in Economies with Prior Tax Distortions, chapter 26, pages 504-522, Edward Elgar Publishing.
    17. Ritter, Hendrik & Zimmermann, Karl, 2019. "Cap-and-Trade Policy vs. Carbon Taxation: Of Leakage and Linkage," EconStor Preprints 197796, ZBW - Leibniz Information Centre for Economics.
    18. Ronald Ravinesh Kumar & Peter Josef Stauvermann & Lien Thi Mai Dau, 2025. "Exploring the Tourism and Economic Growth Relationship in Vietnam: A Cointegration Analysis with Model-Specific Structural Breaks," Economies, MDPI, vol. 13(2), pages 1-47, January.
    19. Sam Fankhauser & Cameron Hepburn, 2009. "Carbon markets in space and time," GRI Working Papers 3, Grantham Research Institute on Climate Change and the Environment.
    20. Franz Hackl & Gerald Pruckner, 1997. "Towards More Efficient Compensation Programmes for Tourists' Benefits From Agriculture in Europe," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 10(2), pages 189-205, September.

    More about this item

    Keywords

    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cdl:uctcwp:qt3rb1472g. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Lisa Schiff (email available below). General contact details of provider: https://edirc.repec.org/data/itucbus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.