Cost-efficiency methodology for the selection of new car emission standards in Europe
In the Auto-Oil Programme, the European Commission looks for emission limits for cars such that the urban air quality targets are reached at minimum cost. This optimisation problem was solved by Degraeve et al. (1998). In this paper we deal with two methodological problems in this cost efficiency approach. We study first what is known as the overachievement problem in cost-effectiveness analysis. In a pure cost-efficiency approach, there is a tendency to understate the merits of federal regulatory measures: because these measures are uniform they will always do more than required in some regions. We prove this and show how this problem can be solved using minimum information on the benefits of environmental improvements. The second problem we study is the implementation problem of local measures. From a European wide perspective, it may be cost-efficient that some regions take local measures but this is not necessary in the interest of these regions when there is transfrontier pollution. When this behavioural constraint is taken into account, the cost efficient bundle will change. We show how these two considerations affect the selection of optimal emission standards for cars in Europe.
|Date of creation:||Nov 2001|
|Date of revision:|
|Contact details of provider:|| Postal: Naamsestraat 69, 3000 Leuven|
Phone: +32-(0)16-32 67 25
Fax: +32-(0)16-32 67 96
Web page: http://feb.kuleuven.be/Economics
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:ete:etewps:ete0125. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (library EBIB)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.