A (Green) Switch in Time Saves Nine: Assessing the Environmental Damage of the European Truck Cartel

This study examines how the cartel of European truck manufacturers coordinated the timing of compliance with emission standards, generating additional air pollution without violating environmental regulations. Although firms formally complied with environmental law, collusion restricted competition over cleaner technologies, highlighting that anticompetitive agreements can have significant environmental and health consequences. First, we quantify the volume of particulate emissions attributable to cartel behavior by constructing two plausible counterfactual scenarios for truck fleet composition, identifying substantial excess emissions of approximately 119 thousand tonnes of fine particulate matter (PM2.5). Second, we estimate the health impact of traffic-related PM2.5 emissions on infant respiratory outcomes using a panel of 199 European subregions observed over an 18-year period. To address endogeneity concerns, we exploit exogenous variation in EURO emission standards through a shift-share instrumental-variable strategy. The resulting elasticity allows us to compute the number of infant respiratory hospital admissions attributable to the cartel under counterfactual competitive conditions. We estimate that earlier, competition-driven adoption of cleaner technologies could have reduced average yearly infant hospital admissions by 12–18 cases per 1,000 births at the NUTS 2 level.