using loopholes to reveal the marginal cost of regulation the case of fuel economy standards estimating the cost of regulation is difficult firms sometimes reveal costs indirectly however when they exploit loopholes to avoid regulation we apply this insight to fuel economy standards for automobiles these standards feature a loophole that gives automakers a bonus when they equip a vehicle with flexible fuel capacity profitmaximizing automakers will equate the marginal cost of compliance using the loophole which is observable with the unobservable costs of strategies that genuinely improve fuel economy based on this insight we estimate that tightening standards by one mile per gallon would have cost automakers just 9 27 per vehicle in recent years jel l51 l62 q48

new vehicle feebates new vehicle feebate programs encourage improved fleet wide vehicle fuel efficiency yet analyses of these policies have been limited to ad hoc proposals in this paper we exploit an extensive multi year dataset which includes more than 16 million observations to evaluate the welfare implications of a long standing vehicle feebate program in the canadian province of ontario we 1 show that second best optimal feebates can be written as a function of new vehicle pigouvian taxes 2 find that ontario s feebate program was welfare enhancing relative to a no feebate scenario but that a second best optimal benchmark would have yielded additional welfare while reducing fleet wide emissions and 3 find that ontarian consumers responded asymmetrically to fees versus rebates

is the stock market sticker shocked a study of market response to recent cafe regulations in the us in response to increasing environmental concerns to improve energy security and to conserve energy use the us government has proposed a new round of corporate average fuel economy cafe standards many studies have focused on how the cafe standard can be met by various automakers that have sales in the us market and the costs and benefits of the companies meeting the standard however the stock markets view on the impact of the standard on automakers profitability is largely absent we study the more recent episode of the cafe regulation in an effort to try to detect the market response using the standard event study method our empirical findings suggest that while the stock market had some responses to the regulation the large scale and systematic reaction to the regulation is absent in addition the market response pattern to the regulation appears to be tied to the individual company s compliance condition if there is any significant response at all

vehicle scrappage and gasoline policy abstract we estimate the sensitivity of scrap decisions to changes in used car values and show how this scrap elasticity produces emissions leakage under fuel efficiency standards a process known as the gruenspecht effect we first estimate the effect of gasoline prices on used vehicle values and scrappage of vehicles with different fuel economies we then estimate the scrap elasticity itself which we find to be 0 7 when applied in a model of fuel economy standards 13 16 percent of the expected fuel savings leak away through the used vehicle market this effect rivals or exceeds the importance of the often cited mileage rebound effect jel h23 l62 l78 q35 q38 q48 q58

the regulation of surface freight transportation the welfare effects revisited this paper reexamines a topic that has been much studied by economists estimating the effects on resource allocation of the economic regulation of surface freight transport it demonstrates that in several studies the methods used to estimate the welfare costs of rate regulation are invalid develops a correct procedure and provides estimates of the welfare effects using data and estimates of modal market share relationships from a study by boyer the paper also analyzes some implications of an important assumption that is common among studies of the transportation sector the assumption is that the total quantity of freight shipments by all modes is invariant with respect to tariff levels

liability for past environmental contamination and privatization this paper examines the role ofliability for past environmental contaminationin the privatization processes of central andeastern europe in particular it establishes alink between a risk averse investor s amount ofinformation regarding the extent of pastenvironmental contamination and its cleanupcosts and the investor s willingness to payfor a particular enterprise i e bid as theinvestor obtains a more precise estimate of theuncertain cleanup costs the investor facesless risk therefore the investor s riskpremium falls and the investor s bid rises this link generates four hypotheses regarding aprivatization agency s responses to theinvestor s knowledge of clean up costs

clearing the air the costs and consequences of higher cafe standards and increased gasoline taxes abstract concerns about energy security and climate change have sparked legislators interest in reducing gasoline consumption by increasing corporate average fuel economy cafe standards using an empirically rich simulation model and cost estimates for anticipated fuel economy technologies we estimate annual costs of reducing long run gasoline consumption by 10 via a 3 8 miles per gallon increase in the standards and the potential cost savings from allowing manufacturers to buy and sell fuel economy credits maximum gasoline savings would be realized only after all existing vehicles were replaced or 14 years in our model a gasoline tax would produce greater immediate savings by encouraging people to drive less and eventually to choose more fuel efficient vehicles we demonstrate the advantage of a tax by comparing the cost of the higher cafe standards over the first 14 years against the cost of a gasoline tax that would save the same amount of gasoline over that time

models of currency crises with self fulfilling features the discomfort a government suffers from speculation against its currency determines the strategic incentives of speculators and the scope for multiple currency market equilibria after describing an illustrative model in which high unemployment may cause an exchange rate crisis with self fulfilling features the paper reviews some other self reinforcing mechanisms recent econometric evidence seems consistent with the practical importance of these mechanisms

value of time speeding behavior and gasoline prices abstract value of time vot is a key parameter in economics and policy this paper presents an alternative method to estimate vot by analyzing an hourly dataset on drivers speeding behavior as a function of the gasoline price our identification strategy is novel as it is based on the intensive margin in comparison previous studies reveal vot on the extensive margin but choice alternatives have multiple attributes thereby potentially confounding estimates consistent with the range of the prior literature we find a vot of about 50 of the wage rate and analyze sources of bias from accidents and traffic tickets these bias functions suggest that previous stated preference vot estimates are likely downward whereas previous revealed preference estimates are likely upward biased

estimating the supply and demand of gasoline using tax data abstract we estimate supply and demand functions for the u s gasoline market using information from excise tax returns provided by the irs for the period 1990 2009 we find price and income elasticities of demand similar to those found using eia data we find a price elasticity of supply of 0 29 which differs from the common assumption of a perfectly inelastic short run supply curve by using a novel data source the analysis provides a robustness check of aggregate studies of gasoline demand and a consistent econometric estimate of the price elasticity of gasoline supply the results are useful in guiding tax and regulatory policies regarding gasoline consumption

distributional and efficiency impacts of increased us gasoline taxes we examine the impacts of increased us gasoline taxes in a model that links the markets for new used and scrapped vehicles and recognizes the consider able heterogeneity among households and cars household choice parameters derive from an estimation procedure that integrates individual choices for car ownership and miles traveled we find that each cent per gallon increase in the price of gasoline reduces the equilibrium gasoline consumption by about 0 2

gasoline taxes or efficiency standards a heterogeneous household demand analysis abstract using detailed consumer expenditure survey data and a flexible semiparametric dynamic demand model this paper estimates the price elasticity and fuel efficiency elasticity of gasoline demand at the household level the goal is to assess the effectiveness of gasoline taxes and vehicle fuel efficiency standards on fuel consumption the results reveal substantial interaction between vehicle fuel efficiency and the price elasticity of gasoline demand the improvement of vehicle fuel efficiency leads to lower price elasticity and weakens consumers sensitivity to gasoline price changes the offsetting effect also differs across households due to demographic heterogeneity these findings imply that when gasoline taxes are in place tightening efficiency standards will partially offset the strength of taxes on reducing fuel consumption

pounds that kill the external costs of vehicle weight heavier vehicles are safer for their own occupants but more hazardous for other vehicles simple theory thus suggests that an unregulated vehicle fleet is inefficiently heavy using three separate identification strategies we show that controlling for own vehicle weight being hit by a vehicle that is 1000 pounds heavier generates a 40 50 increase in fatality risk these results imply a total accident related externality that exceeds the estimated social cost of us carbon emissions and is equivalent to a gas tax of 0 97 per gallon 136 billion annually we consider two policies for internalizing this external cost a weight varying mileage tax and a gas tax and find that they are similar for most vehicles the findings suggest that european gas taxes may be much closer to optimal levels than the us gas tax language en

energy efficiency policy in a non cooperative world abstract in this paper we explore energy efficiency policies in the presence of a global environmental problem and international cost interdependency associated with r d activities we develop a simple model with two regions where the cost of an appliance in one region depends upon the level of energy efficiency in that region and the level of r d activities by the appliance industry in our model the cooperative outcome can be decentralized by imposing a tax on energy however we show that when regions do not cooperate they have an incentive to adopt additional instruments to increase energy efficiency the reason is that the lack of cooperation leads to under taxation of the environmental externality which in turn creates an incentive to try to reduce emissions produced abroad we illustrate this phenomenon with the californian vehicle greenhouse gas standards

the impact and the spillover effect of a sovereign rating announcement on the euro area cds market abstract this paper analyzes the impact and the spillover effect of a sovereign rating announcement on the euro area cds market through the event study technique we demonstrate that downgrades and upgrades considerably affect financial markets the relevance of the impact is due to the introduction of new information after a rating change announcement information discovery effect and to the role of rating in the current financial regulation certification effect conversely the cds market does not seem to react significantly to rating warning outlook and review announcements furthermore we find evidence of a spillover effect only after a downgrade announcement our results show that the size of the spillover effect is influenced by economic and financial conditions of analyzed countries and that international bank flows between emu members represent an important transmission channel of the spillover effect

tradable fuel economy credits competition and oligopoly corporate average fuel economy cafe regulations specify minimum standards for fuel efficiency that vehicle manufacturers must meet independently we design a system of tradeable fuel economy credits that allows trading across vehicle classes and manufacturers with and without considering market power in the credit market we perform numerical simulations to measure the potential cost savings from moving from the current cafe system to one with stricter standards but that allows vehicle manufacturers various levels of increased flexibility we find that the ability for each manufacturer to average credits between its cars and trucks provides a large percentage of the potential savings as expected the greatest savings come from the greatest flexibility in the credit system market power lowers the potential cost savings to the industry as a whole but only modestly loss in efficiency from market power does not eliminate the gains from credit trading

the risk of the sovereign debt default the eurozone crisis 2008 2013 abstractwe investigate the relationship of the market pricing of sovereign risk to default through credit default swap cds spreads for 16 eurozone countries during 2008q1 2013q3 we take into account through appropriate non linear generalized method of moments gmm estimations the endogeneity problem we focus on fiscal space debt or fiscal and the downgrade announcements down we find debt fiscal to have significant insignificant effects on the cds concave function as well as down in a linear one it has also been confirmed significant pricing discrimination between south and west euro area periphery sweap and the core eurozone highlighting asymmetries discovered either by the respective size of estimated debt coefficients or by the significant effects of down that have only on cds of sweap countries the current account balance or the inflation rate as well as relevant interaction terms seem not to affect the spreads of the emu these findings together with the estimated structur

comparing flexibility mechanisms for fuel economy standards since 1975 the corporate average fuel economy cafe program has been the main policy tool in the us for coping with the problems of increasing fuel consumption and dependence on imported oil the program mandates average fuel economy requirements for the new vehicle sales of each manufacturer s fleet with separate standards for cars and light trucks the fact that each manufacturer must on its own meet the standards means that the incentives to improve fuel economy are different across manufacturers and vehicle types although the problems associated with fuel consumption do not make such distinctions this paper evaluates different mechanisms to offer automakers the flexibility of joint compliance with nationwide fuel economy goals tradable cafe credits feebates output rebated fees and tradable credits with banking the policies are compared according to the short and long run economic incentives as well as to issues of transparency implementation administrative and transaction costs and uncertainty

property transfers and environmental pollution incentive effects of alternative policies this paper considers how trans ferring some or all future responsibility for cleanup of a contaminated site affects the cur rent owner s incentives to reduce contamina tion given that he anticipates selling his prop erty in the future the results depend on the probabilities that the parties will be judgment proof the distribution of surplus and whether there is joint and several liability contrary to popular belief we show that transferring liabil ity can actually increase the seller s incentive to invest in pollution abatement furthermore abatement incentives are at least as great and generally greater with joint and several liability than without it jel q2

reducing petroleum consumption from transportation diesel fuels alone account for 60 percent of oil consumption the economic argument for seeking to reduce this level of consumption of petroleum based liquid ment for seeking to reduce this level of consumption of petroleum based liquid fuel begins with the externalities associated with high levels of u s consumption of fuel begins with the externalities associated with high levels of u s consumption of petroleum based fuels petroleum based fuels

the division of markets is limited by the extent of liquidity spatial competition with externalities liquidity considerations will limit the number of markets in a competitive economy welfare implications are ambigious since liquidity is a positive externality there may be too little liquidity per market at a noncooperative equilibrium and too many markets compared to the surplus maximizing market structure but liquidity is also self reinforcing given an existing equilibrium new markets may not open because nobody wants to use a new market with low liquidity there may be too few markets to achieve efficiency a nondiscriminating monopolist will operate smaller and more numerous markets compared to optimality as well as to the equilibrium of independent auctioneers copyright 1988 by american economic association

the substantial bias from ignoring general equilibrium effects in estimating excess burden and a practical solution we show that under typical conditions the simple excess burden triangle formula substantially underestimates the excess burden of commodity taxes in some cases by a factor of 10 or more this formula performs poorly because it ignores general equilibrium interactions most important interactions between the taxed commodity and the labor market many prior studies have shown that general equilibrium interactions affect excess burden but have not appreciated the bias associated with ignoring these interactions or the quantitative importance of this bias we derive an implementable alternative to the simple formula this alternative formula captures interactions that the simple formula omits as a result it is both unbiased and usually more accurate

sovereign spreads in the eurozone which prospects for a eurobond in this paper we provide new evidence on the determinants of sovereign yield spreads and market sentiment effects in the eurozone in order to evaluate the rationale for a common eurobond jointly guaranteed by eurozone member states we find that default risk is the main driver of yield spreads suggesting small gains from greater liquidity fiscal fundamentals matter in the pricing of default risk but only as they interact with other countries yield spreads that is with the global risk that the market perceives more importantly the impact of this global risk variable is not constant over time a clear sign of contagion driven by shifts in market sentiment this evidence points to a discontinuity in the disciplinary role of financial markets if markets can stay irrational longer than a country can stay solvent then the role of yield spreads on national bonds as a fiscal discipline device is considerably weakened and issuing eurobonds can be economically justified carlo favero and alessandro missale

the financial trilemma abstract the financial trilemma states that financial stability financial integration and national financial policies are incompatible any two of the three objectives can be combined but not all three one has to give this paper develops a model to underpin the financial trilemma

simpler is better predicting consumer vehicle purchases in the short run abstract when agencies such as the us environmental protection agency epa establish future greenhouse gas emissions standards for new vehicles forecasting future vehicle purchases due to changes in fuel economy and prices provides insight into regulatory impacts we compare predictions from a nested logit model independently developed for us epa to a simple model where past market share predicts future market share using data from model years 2008 2010 and 2016 the simple model outperforms the nested logit model for all goodness of prediction measures for both prediction years including changes in vehicle price and fuel economy increases bias in forecasted market shares this bias suggests price increases are correlated with unobserved increases in vehicle quality changes in preferences or brand specific changes in market size but not cost pass through for 2010 past shares predict better than a nested logit model despite a major shock the economic disruption caused by the great recession observed share changes during this turbulent period may offer upper bounds for policy changes in other contexts the largest observed change in market share across the two horizons is 6 6 for manufacturers in 2016 and 3 4 for an individual vehicle in 2010

to rebate or not to rebate fuel economy standards versus feebates we compare the welfare effects in equilibrium of two environmental regulations that aim at increasing the new cars fleet s average fuel efficiency the fuel economy standards and the feebate policies maintaining the same environmental benefit and tax revenue we simulate the implementation of each policy in france and the united states standard type policies have larger negative welfare effects up to 3 2 times those from the feebate effects on manufacturers are heterogeneous some are better of under the standard regulation the addition of a market to trade levels of fuel efficiency dominates the simple standard regulation but not always the feebate we also consider the attribute based standard technological improvements and the equivalence with fuel taxes as extensions

new vehicle characteristics and the cost of the corporate average fuel economy standard by 2016 the corporate average fuel economy cafe standard will increase by 40 this article focuses on the medium run effects of fuel economy regulation we estimate consumers willingness to pay for vehicle characteristics we employ a novel empirical strategy that accounts for the characteristics endogeneity by using variation of engine models used in vehicle models the results imply that consumers value an increase in power more than an increase in fuel economy simulations of the effects of an increase in the cafe standard suggest that regulatory costs are significantly smaller in the medium run than in the short run

the importance of the design of market based instruments for co2 mitigation an age analysis for spain in the past few decades economists have defended the use of market based instruments mbi in environmental and climate policy there have been many papers which have compared the costs of attaining environmental objectives with mbis and with command and control instruments however very few have compared different mbis in examining these costs this paper seeks to analyse various mbis for co2 mitigation from the viewpoint of cost effectiveness using an age applied general equilibrium model for the case of spain a distinction is drawn between 1 quantity instruments which represent different extents of a market for emission permits and 2 price instruments which represent different types of tax each instrument can affect different segments of the emission sources and therefore can have very different effects on the economy as a whole we show how mbi can help to minimise mitigation costs but also how taxes and tradable emission permits that are limited or constrained by many exemptions and distortions can raise costs considerably

fuel economy car class mix and safety fuel economy standards change the composition of the vehicle fleet potentially influencing accident fatality risks i estimate the direction and magnitude of this impact introducing a correction for selection on driver behavior a policy application using my new estimates shows that the present distinction between light trucks and cars in fuel economy rules has very negative consequences for overall safety each mpg increment to the standard results in an additional 150 fatalities per year in expectation my correction for selection is pivotal in this finding i then demonstrate a simple alternative regulation that can produce near zero changes in accident fatalities

are the costs of reducing greenhouse gases from passenger vehicles negative energy models suggest that the costs of reducing carbon emissions from transportation are high relative to those for other sectors this paper discusses why taxes or equivalent permit systems to reduce passenger vehicle emissions produce large net benefits rather than costs when account is taken of a their impact on reducing other highway externalities besides carbon and b interactions with the broader fiscal system both of these considerations also strengthen the case for a tax based approach over fuel economy regulation while fiscal considerations strengthen the case for taxes over grandfathered emissions permits the paper also comments on the practical relevance of automobile fuel taxes or their policy equivalents to broader legislation intended to mitigate climate change

the effects of the corporate average fuel efficiency standards in the us this paper examines the effects of the corporate average fuel economy standards cafe on automobile sales prices and fuel consumption first a discrete choice model of automobile demand and a continuous model of vehicle utilization are estimated using micro data from the consumer expenditure survey for 1984 1990 next the demand side model is combined with a model of oligopoly and product differentiation on the supply side with these elements in place the effects of the cafe regulation are assessed through simulations and compared to the effects of alternative policy instruments such as an increase in gasoline tax

instrument choice and stranded assets in the transition to clean capital abstract this paper compares the impact of different climate mitigation policies mandates feebates performance standards and carbon pricing in a ramsey model with clean and polluting capital irreversible investment and a climate constraint these policy instruments imply different transitions to the same balanced growth path the optimal carbon price minimizes the discounted social cost of the transition to clean capital but may prompt premature retirement of existing polluting capacities and significant private costs in the form of stranded assets second best mandates and feebates affect new investment decisions without providing incentives to under use existing polluting equipment these instruments lead to higher discounted social costs but smoother abatement costs and do not result in premature retirement or stranded assets a phased in carbon price can avoid premature retirement but still result in stranded assets that is in a drop of wealth for the owners of polluting capital we discuss a potential trade off between the political feasibility and cost effectiveness of climate mitigation policies

effect of gasoline prices on car fuel efficiency evidence from lebanon abstract this paper explores how gasoline prices affect the sales of new and used cars in lebanon using a rich dataset on monthly imported cars from 2000 to 2016 a vector autoregressive analysis is used to model different consumer choices between fuel efficient cars midsize cars and fuel inefficient cars we report the first empirical evidence on this question from the middle east and north africa mena region using individual automobile data we use within sample and out of sample tests to examine whether gasoline prices influence the sale of fuel efficient cars our results show evidence against the hypothesis that rising gasoline prices shift consumers demand toward the most fuel efficient cars

analysing gasoline demand elasticities a survey this paper is a survey of studies on gasoline demand although there are very many dxerent studies in this eld which sometimes appear to arrive at contradictory results we find that with proper stratification of studies by model and data type much of the contict turns to consensus in this survey we classtfy studies by data type and by ten d erent categories of model and with the exception of estimates on seasonal data which tend to be unstable and of certain inappropriate model formulations we find a fair degree of agreement concerning average short run and even long run income and price elasticities

the simple economics of motor vehicle pollution a case for fuel tax the volume of pollution produced by an automobile is determined by driver s behavior along three margins i vehicle selection ii kilometers driven and iii on road fuel economy the first two margins have been studied extensively however the third has received scant attention how significant is this intensive margin what would be the optimal policies when it is taken into account the paper develops and analyzes a simple model of the technical and behavioral mechanisms that determine the volume emissions produced by a car the results show that an optimal fuel tax would provide drivers with appropriate incentives along all three margins and that only public information is needed for a fuel tax to be set optimally in contrast an optimal distance tax would require private information lastly relative to the optimal fuel tax a simple uniform fuel tax is shown to be progressive thus being already deployed worldwide a uniform fuel tax is an attractive second best policy these findings should be accounted for when designing new mechanisms to alleviate motor vehicle pollution

a critical review of china s rapidly developing renewable energy and energy efficiency policies renewable energy and energy efficiency reee policies have far reaching implications for energy security climate change economic competitiveness pollution and human livelihood for these reasons reee has become a national priority for the chinese government particularly since 2005 this paper aims to critically review china s reee policies in six sectors electricity industry transportation buildings and local government in addition to examining the progress china has made in the development and implementation of reee policies this review also identifies limitations and room for improvement finally five policy recommendations are presented

fuel consumption and gasoline prices the role of assortative matching between households and automobiles abstract analyses of policies to reduce gasoline consumption have focused on two effects a compositional effect on the fuel economy of the automotive fleet and a utilization effect on how much people drive however the literature has missed a third effect a matching effect in which policies change how high utilization households are matched to fuel efficient vehicles in equilibrium we show that higher gas prices should lead to stronger assortative matching empirical estimates using us micro level data are consistent with this hypothesis we find a 0 50 increase in the gas tax would reduce us gas consumption by 0 8 through the matching effect alone bringing annual environmental benefits of about 1 7 billion

are energy efficiency standards justified abstract this paper develops an analytical framework for comparing the welfare effects of energy efficiency standards and pricing policies for reducing gasoline electricity and nationwide carbon emissions the model is parameterized with us data and includes key externalities in the energy transportation sectors and possible underinvestment in energy efficiency due to misperceptions over energy savings even with large misperceptions the extra welfare gains from complementing efficient pricing policies with energy efficiency standards are zero for reducing gasoline and 5 percent for reducing electricity and when viewed as substitutes these standards forgo 60 percent or more of the potential welfare gains from corresponding pricing policies a combination of energy efficiency and emissions standards is more than three times as costly as carbon pricing when there is no misperception over energy savings and even with large misperceptions combining carbon pricing with gasoline electricity taxes is better than combining it with energy efficiency standards

government failure and market failure on the inefficiency of environmental and energy policy in this article we describe some important themes in energy and environmental policy there are two main reasons for our interest in these policies first such policies will likely be important in the coming decades as issues related to climate change and energy security come to the fore second there are important lessons to be learned from a careful review of the actual performance of energy and environmental policies we undertake a selective survey of the literature to highlight what is known about the efficiency of particular kinds of policies laws and regulations in these areas this paper makes three key contributions the first is to synthesize a large literature on energy and environmental policy in a way that can be easily digested by both non experts and experts the second contribution is to suggest that if history is a guide then we should not expect many interventions in these policy areas to come close to maximizing net economic benefits the third is to suggest what might be needed for the development of more efficient energy and environmental policies copyright 2010 oxford university press

liquidity spillovers in sovereign bond and cds markets an analysis of the eurozone sovereign debt crisis at the end of 2009 countries in the eurozone euro area began to experience a sudden divergence of bond yields as the market perception of sovereign default risk increased the theory of complete markets suggests that sovereign debt and credit default swap cds credit spreads should track each other closely in addition liquidity risk should be priced into both instruments in such a way that buying exposure to the same default risk is identically priced we use a time varying vector autoregression framework to establish the credit and liquidity spread interactions over the 2009 2010 crisis period we find substantial variation in the patterns of the transmission effect between maturities and across countries our major result is that for several countries including greece ireland and portugal the liquidity of the sovereign cds market has a substantial time varying influence on sovereign bond credit spreads this evidence is of particular importance in the current policy context

automobile externalities and policies this paper discusses the nature and magnitude of externalities associated with automobile use including local and global pollution oil dependence traffic congestion and traffic accidents it then discusses current federal policies affecting these externalities including fuel taxes fuel economy and emissions standards and alternative fuel policies summarizing insofar as possible the welfare effects of those policies finally we discuss emerging pricing policies including congestion tolls and insurance reform and summarize the appropriate combination of policies to address automobile externalities

policy watch the economics of fuel economy standards one of the most hotly contested of all energy policy issues involves corporate average fuel economy or cafe standards for new cars and light duty trucks tighter standards would reduce gasoline consumption and hence both greenhouse gas emissions as well as this country s vulnerability to oil price shocks but they would also increase the price of new vehicles worsen traffic congestion and depending on how they are phased in possibly even reduce occupant safety these effects are amenable to economic analysis and we review the evidence to date bearing on this interesting and important question

the market impact and the cost of environmental policy evidence from the swedish green car rebate we quantify the effects of the swedish gcr a program to reduce oil dependence and greenhouse gas emissions in the automobile industry we find the gcr to increase the market shares of green cars and its cost to be 109 tonco2 saved thus 5 times the price of an emission permit since the main green cars in sweden are ffvs flexible fuel vehicles which can switch between petrol gasoline and ethanol we also account for fuel choice which increases the cost of the program finally we show that consumers would have purchased ffvs regardless of the rebate provided by the gcr

the effect of vehicle fuel economy standards on technology adoption abstract many countries are tightening passenger vehicle fuel economy standards this paper provides the first empirical evidence on the effects of fuel economy standards on technology adoption we investigate changes in the rate and direction of technology adoption that is the extent to which technology is used to increase fuel economy at the expense of other vehicle attributes we find that recent changes in u s and european standards have both increased the rate of technology adoption and affected the direction of technology adoption producers reduced horsepower and torque compared to a counterfactual in which fuel economy standards remained unchanged we estimate opportunity costs from reduced horsepower and torque to be economically significant relative to the gains from fuel savings

environmental policy and the energy efficiency of vertically differentiated consumer products we analyse optimal environmental policies in a market that is vertically differentiated in terms of the energy efficiency of products considering energy taxes subsidies to firms for investment in more eco friendly products and product standards we are particularly interested in how distributional goals in addition to environmental goals shape the choice of policy instruments we ond that an industry friendly government levies an energy tax to supplement a lax product standard but shies away from subsidies to firms by contrast a consumer friendly government relies heavily on a strict product standard and additionally implements a moderate subsidy to firms but avoids energy taxes

granger causality in peripheral emu public debt markets a dynamic approach our research aims to analyze the possible existence of granger causal relationships in the behavior of public debt issued by peripheral member countries of the european economic and monetary union emu with special emphasis on the recent episodes of crisis triggered in the eurozone sovereign debt markets since 2009 with this goal in mind we make use of a database of daily frequency of yields on 10 year government bonds issued by five emu countries greece ireland italy portugal and spain covering the entire history of the emu from its inception on 1 january 1999 until 31 december 2010 in the first step we explore the pair wise granger causal relationship between yields both for the whole sample and for changing subsamples of the data in order to capture the possible time varying causal relationship this approach allows us to detect episodes of significant increase in granger causality between yields on bonds issued by different countries in the second step we study the determinants of these episodes analyzing the role played by different factors paying special attention to instruments that capture the total national debt domestic and foreign in each country

indivisible toxic torts the economics of joint and several liability cost effective or efficient pollution control has traditionally devoted most of its attention to analyzing the effects of legislative or regulatory policy instruments such as emission taxes or marketable emission permits recent contributions have expanded this focus to include the effects of monitoring and enforcement policies 2 with a few noteworthy exceptions 3 however the role of the court system in general and liability law in particular have not received analytical attention among environmental economists in proportion to their importance in resource allocation

product differentiation and oligopoly in international markets the case of the u s automobile industry this paper develops and estimates a model of the u s automobile industry on the demand side a discrete choice model is adopted that is estimated using micro data from the consumer expenditure survey the estimation results are used in conjunction with population weights to derive aggregate demand on the supply side the automobile industry is modelled as an oligopoly with product differentiation equilibrium is characterized by the first order conditions of the profit maximizing firms the estimation results are used in counterfactual simulations to investigate two trade policy issues the effects of the ver and exchange rate pass through

the impacts of energy efficiency policies meta analysis abstract this paper attempts to quantitatively summarize the existing empirical evidence on the effects of energy efficiency policies on energy demand and on the price of associated durable goods as well as to identify the main factors that systematically affect the estimated impacts to this end a meta regression analysis of the effects of energy efficiency policies is carried out on the basis of an extensive review of the existing literature selecting those studies that analyze the impact of energy efficiency policies with respect to a business as usual setting taking into account the econometric problems associated with this type of analysis intra class correlation cross sectional dependence publication bias in pursuit of robust outcomes the results show that the studies analyzing the effects of energy efficiency policies estimate a significant impact of these policies on energy demand 10 5 8 8 and the price of related durable goods 7 9 6 the main factors that influence results are the policy instrument the targeted sector the type of country the analyzed period the consideration of free riders and the type of analysis data and publication energy demand and the sector and analyzed period price of durables

the effect of standards and fuel prices on automobile fuel economy an international analysis abstract there is an intense debate over whether fuel economy standards or fuel taxation is the more efficient policy instrument to raise fuel economy and reduce co 2 emissions of cars the aim of this paper is to analyze the impact of standards and fuel prices on new car fuel economy with the aid of cross section time series analysis of data from 18 countries we employ a dynamic specification of new car fuel consumption as a function of fuel prices standards and per capita income it turns out that standards have induced considerable fuel savings throughout the world although their welfare impact is not examined here if standards are not further tightened then retail fuel prices would have to remain at high levels for more than a decade in order to attain similar fuel savings finally without higher fuel prices or tighter standards one should not expect any marked improvements in fuel economy under business as usual conditions

the strategic use of innovation to influence regulatory standards this paper investigates the welfare consequences of strategic behavior by firms to affect the amount of environmental regulation they face environmental regulation often attempts to force an industry to develop cleaner technology but the regulator may have no means to commit to a specific standard this lack of regulatory commitment induces firms to choose innovation strategically it is well known that firms have incentives to suppress innovation to induce the regulator to ratchet down the standard and this strategic behavior lowers welfare this paper explores a countervailing incentive in oligopoly settings firms have heightened incentives to innovate so as to increase regulation and raise rivals costs in equilibrium the incentive to raise rivals cost can mitigate the welfare loss arising from no regulatory commitment also a regulator who is unable to commit ex ante to the stringency of a regulatory standard can induce more clean technology than a regulator with a commitment mechanism

the incidence of congestion tolls on urban highways abstract the incidence of an optimal short run congestion toll is investigated using an equilibrium model of modal choice and congestion on a highway corridor served by express bus transit it is argued that for an externality tax the usual equi revenue analysis of burdens is inappropriate instead welfare effects are computed under three alternative assumptions about redistribution of toll revenues in almost all cases the net result is benefits for all income groups it is concluded that congestion tolls should not be rejected on grounds of income distribution but that an explicit package of tolls and revenue uses is probably a political prerequisite for adoption