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Emissions Trading with Telecommuting Credits: Regulatory Background and Institutional Barriers

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  • Nelson, Per-Kristian

    () (Resources for the Future)

Abstract

The 1999 National Telecommuting and Air Quality Act created pilot programs in five metropolitan areas in the United States to examine whether a particular type of economic incentive, tradable emissions credits created from telecommuting, represents a viable strategy for reducing vehicle miles traveled and improving air quality (H.R. 2094, 2000). Under the ecommute program, companies could generate emissions credits by reducing the vehicle miles traveled (VMT) of their workforce through telework programs. They would then be able to sell the credits to firms that needed the reductions to comply with air quality regulations. This paper provides some context for evaluating whether such a trading scheme represents a feasible approach to reducing mobile source emissions and promoting telecommuting and reviews the limited experience with mobile source emission trading programs. From a regulatory perspective, the most substantial drawback to such a program is its questionable environmental integrity, which is a result of difficulties in establishing sufficiently rigorous quantification protocols to measure accurately the emission reductions from telecommuting. Perhaps more importantly, such a program is not likely to be cost-effective; the emissions reductions from a single telecommuter are extremely small, meaning that any trading program will have relatively high transaction costs to environmental benefits. A comparison of estimated emission reductions from the five pilot cities with historical and projected emission credit and allowance prices indicates that the yearly revenue per participant is likely to be well under $100, substantially below what firms participating in the program said would be an adequate incentive to induce a substantial increase in telecommuting. This discussion paper is the final paper in a series of four on telecommuting published in by RFF in December 2004. In discussion paper 04-42, Walls and Nelson analyze data from five pilot cities enrolled in the “ecommute” program. In 04-43 Safirova and Walls examine the 2002 Telework survey conducted in California and, in 04-44, these authors review the empirical literature on telecommuting with a focus on trip reduction impacts. The studies by RFF are part of a larger report on the ecommute program completed by the Global Environment and Technology Foundation (GETF) for the U.S. Environmental Protection Agency. More information about the overall project can be found on the ecommute/GETF website: http://www.ecommute.net/program/.

Suggested Citation

  • Nelson, Per-Kristian, 2004. "Emissions Trading with Telecommuting Credits: Regulatory Background and Institutional Barriers," Discussion Papers dp-04-45, Resources For the Future.
  • Handle: RePEc:rff:dpaper:dp-04-45
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    File URL: http://www.rff.org/RFF/documents/RFF-DP-04-45.pdf
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    References listed on IDEAS

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    1. Pizer, William & Kruger, Joseph, 2004. "The EU Emissions Trading Directive: Opportunities and Potential Pitfalls," Discussion Papers dp-04-24, Resources For the Future.
    2. Burtraw, Dallas & Palmer, Karen, 2003. "The Paparazzi Take a Look at a Living Legend: The SO2 Cap-and-Trade Program for Power Plants in the United States," Discussion Papers dp-03-15, Resources For the Future.
    3. Safirova, Elena & Gillingham, Kenneth & Houde, Sébastien, 2007. "Measuring marginal congestion costs of urban transportation: Do networks matter?," Transportation Research Part A: Policy and Practice, Elsevier, vol. 41(8), pages 734-749, October.
    4. Walls, Margaret & Nelson, Per-Kristian, 2004. "Telecommuting and Emissions Reductions: Evaluating Results from the ecommute Program," Discussion Papers dp-04-42, Resources For the Future.
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    Cited by:

    1. Margaret Walls & Peter Nelson & Elena Safirova, 2005. "Telecommuting and environmental policy - lessons from the Ecommute program," ERSA conference papers ersa05p801, European Regional Science Association.

    More about this item

    Keywords

    telecommuting; emissions trading;

    JEL classification:

    • R4 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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