the economics of a blend mandate for biofuels a biofuel blend mandate may increase or decrease consumer fuel prices with endogenous oil prices depending on relative supply elasticities biofuel tax credits always reduce fuel prices tax credits result in lower fuel prices than under a mandate for the same level of biofuel production if tax credits are implemented alongside mandates then tax credits subsidize fuel consumption instead of biofuels this contradicts energy policy goals by increasing oil dependency co 2 emissions and traffic congestion while providing little benefit to either corn or ethanol producers these social costs will be substantial with tax credits costing taxpayers 28 7 billion annually by 2022 copyright 2008 oxford university press

are emissions permits regressive grandfathered emissions permits redistribute income to wealthy households by creating firm rents that ultimately accrue to shareholders consequently they can be highly regressive even if the poor do not have large budget shares for polluting goods using an analytical model this paper estimates the burden of emissions permits borne by different income groups under control of power plant emissions of carbon so2 and nox we also compare the burden borne by poor households under permits with that under emissions taxes performance standards technology mandates and input taxes and we show how the social costs of policies differ from efficiency costs when society has aversion to inequality

the welfare effects of fuel conservation policies in a dual fuel car market evidence from india we estimate a model of vehicle choice and kilometers driven to analyze the long run impacts of fuel conservation policies in the indian car market we simulate the effects of petrol and diesel fuel taxes and a diesel car tax taking into account their interactions with the pre existing petrol fuel tax and car sales taxes at levels sufficient to reduce total fuel consumption by 7 the increased diesel and petrol fuel taxes both yield deadweight losses net of externalities of about 4 2010 rs l however at levels sufficient to reduce total fuel consumption by 2 the increased petrol fuel tax results in a deadweight loss per liter of fuel conserved that is greater than that caused by the diesel fuel tax this reflects both the high pre existing tax on petrol fuel and the high own price elasticities of fuel demand in india a tax on diesel cars that results in the same diesel market share as the large diesel fuel tax actually has a negative deadweight loss per liter of fuel conserved the welfare effects of all three policy instruments are positive once the external benefits of reducing fuel consumption are added to the excess burden of taxation

distributional effects of a carbon tax on car fuels in france this paper analyses the distributional effects of alternative scenarios of carbon taxes on car fuels using disaggregated french panel data from 2003 to 2006 it incorporates household price responsiveness that differs across income groups into a consumer surplus measure of tax burden carbon taxation is regressive before revenue recycling however taking into account the benefits from congestion reduction induced by the tax mitigates regressivity we show also that recycling additional revenues from the carbon tax either in equal amounts to each household or according to household size makes poorest households better off

optimal taxation and cross price effects on labor supply estimates of the optimal gas tax abstract this study estimates parameters necessary to calculate the optimal second best gasoline tax most notably the cross price elasticity between gasoline and leisure prior theoretical work indicates the importance of this elasticity but despite this almost none of the prior studies of commodity taxation and none of the studies on second best environmental regulation actually estimate it using household data we find that gasoline is a relative complement to leisure and thus that the optimal gasoline tax is significantly higher than marginal damages the opposite of the result suggested by the bulk of the prior literature indeed even if there were no externalities at all associated with gasoline the optimal tax rate would still be almost equal to the average gas tax rate in the u s following this approach to estimate cross price elasticities with leisure could strongly influence estimates of optimal rates for other important commodity or pollution taxes

valuing lost home production of dual earner couples using a life cycle model in which women divide their time between home and market work we establish a link between retirement wealth and the value of forgone home production we use data from the health and retirement study to estimate the model s parameters and adjust the growth rate of gdp to reflect reductions in non market output we find that the value of forgone home production is modest about 25 percent of women s measured earnings

sustainability impacts of car road pricing a computable general equilibrium analysis for austria abstract nationwide car road pricing schemes are discussed across europe we analyse the impacts of such schemes with respect to environmental economic and social indicators of sustainability also quantifying the trade offs among these three dimensions under different charging principles and revenue recycling options in our analysis we employ a computable general equilibrium cge approach develop a modelling structure for private transport and provide detailed empirical analysis for the case of austria regarding the social dimension it has often been argued that poorer households and commuters would have to bear a disproportionate share of the road pricing burden we find the contrary i e a stronger negative policy impact on richer households and on a small group of intensive car users the choice of revenue recycling is able to ameliorate the negative social and economic effects of road pricing without reversing the desired positive environmental effects for political feasibility questions of distributional impacts are most urgent and therefore we address them systematically within a quantitative framework

the effectiveness of gasoline taxation to manage air pollution abstract higher gasoline taxes can be justified because cars cause significant local regional and global air pollution damages this study examines whether charging higher taxes would result in significant emission reductions both experimental survey data and actual behavior in southern california and connecticut are evaluated to explore whether people would change their driving behavior in response to higher gasoline prices both sets of results reveal that drivers are price inelastic in the short run 0 4 to 0 6 and long run 0 5 to 0 7 imposing environmental surcharges on gasoline will result in only a small reduction in driving and thus only a small improvement in the environment such taxes will place a heavy and clear burden on drivers however making gasoline taxes extremely unpopular finally the study finds that the income elasticity of gasoline is low 0 1 0 2 so that the gas tax will fall heavily on the poor

distributional effects of taxing transport fuel this paper1 takes as its starting point the observation that fuel prices and thus taxes are important for good management of climate change and other environmental problems to economists this should be no surprise yet it seems that the role of fuel taxation as an instrument of climate policy has not been fully appreciated it is however one of the few policy instruments that since several decades has actually reduced fuel consumption appreciably thanks to taxation mainly in europe and japan carbon emissions are considerably lower than they would have been otherwise in future where carbon emissions are to be cut drastically this instrument will be crucial there is however much opposition to the instrument this opposition uses various arguments for instance that fuel taxes hurt the poor since they are strongly regressive we however find that the choice of country and methodology turns out to be of great consequence we study seven european countries france germany united kingdom italy serbia spain and sweden and do find some evidence of regressivity but the evidence is very weak it does not apply when lifetime income is used and it does not apply to the poorest country in the group the best one line summary is probably that the tax is approximately proportional

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

a review of the ecological and socioeconomic effects of biofuel and energy policy recommendations abstract many countries have attached great emphasis on biofuel because it is universally acknowledged renewable and sustainable however there remain doubts regarding biofuel s renewability cleanliness and ecological friendliness in addition its impacts on income employment and food security have been widely discussed therefore the effect of developing biofuel as an important method of resolving the energy crisis and climate change is questioned based on the rocketing concern on the multiple effects of biofuel this paper provides a comprehensive and updated review of the literature on biofuel s ecological effects and socioeconomic effects the literature included in this paper is selected english language papers being published since 2004 we find that existing studies have not arrived at a consensus regarding the ecological or the socioeconomic effects of biofuel there remain uncertainty and doubts toward biofuel s renewability and cleanliness biofuel s impacts on water and biodiversity are also questioned although biofuel is widely regarded to have positive impacts on income and employment many studies prove that biofuel influences food security negatively besides biofuel s economic cost is likely to be the barrier to its promotion because of the uncertainty of biofuel s impacts this study recommends cautious attitude toward biofuel development especially for those countries where biofuel development would be inappropriate and suggests that policy makers engage in demand side management instead of unsustainable supply side management

gasoline demand revisited an international meta analysis of elasticities meta analysis is used to determine if there are factors that systematically affect price and income elasticity estimates in studies of gasoline demand four econometric models are estimated using long run and short run price and income elasticity estimates from previous studies as the dependent variables explanatory variables include functional form lag structure time span national setting estimation technique and other features of the model structure elasticity estimates are found to be sensitive to the inclusion or exclusion of some measure of vehicle ownership static models appear to overestimate short run elasticities underestimate long run price elasticities but pick up the full long run income responsiveness there is variation in the elasticity of demand across countries especially in the short run and gasoline demand appears to be getting more price elastic and less income elastic over time

a decomposition of the price and income elasticity of the consumer demand for gasoline the authors specify and estimate a model of the short run demand for gasoline which allows them to decompose a consumer s gasoline demand elasticities into miles driven and driving efficiency components their model is estimated using detailed household survey data which allows direct focus on the short run holding both the household s automobile stock and demographic profile fixed among the most interesting results are 1 the data allow interesting insights to be drawn into the interrelationship between these important variables and household behavior with respect to gasoline consumption miles driven and driving efficiency 2 the gasoline demand behavior of one car and multi car households differ significantly from each other evaluated at overall sample means one car households have higher in absolute value price elasticites for gasoline miles driven and fuel efficiency demand conversely multi car households have higher in absolute value total expenditure elasticities for each category 3 for both one car and multi car households roughly 75 of the estimated price elasticity and roughly 80 of the estimated total expenditure elasticity of gasoline demand stem from the miles driven component the estimated fuel efficiency elasticities though smaller than their standard errors indicate that households respond to changes in prices and total expenditure levels not only by changing the number of miles theymore drive but also by changing the efficiency with which they drive them 23 references 3 tables less

intergenerational flows of time and goods consequences of slowing population growth it is feared that low fertility and older age distributions in the developed countries might cause lower life cycle consumption because of the increased pension and health cost burden the theoretical literature on intergenerational transfers has addressed this question but has considered only the consumption of market goods and has made no serious empirical attempt to measure the theoretical concepts necessary to assess the problem this paper develops a theoretical model of intergenerational transfers incorporating time use with the aid of time budget and consumer expenditure surveys empirical estimates of the age profiles of various types of time and goods consumption are presented and we conclude that 1 the net direction of intergenerational transfers is from younger to older ages 2 under the golden rule assumption these transfers largely constitute an externality to childbearing and 3 they are not large enough to offset the capital dilution effect that would result from higher fertility a

emergence of green business models the case of algae biofuel for aviation emergent business models seek to take advantage of new market mechanisms driven by technological changes particularly those related to the production and delivery of clean or sustainable energy such business models often function at the intersection of various industries with global views and the resulting systems have distinct social political environmental economic technological and business dimensions such holistic systems are not only difficult to develop but also require support from a broad range of actors with effective regulations and policies in place such that the firm functions within a framework that integrates various factors this study substantiates such a framework by detailing the nascent algae based bio fuel industry that caters to the aviation sector while arguing that businesses in the energy industry can emerge as a next practice platform that drive a sixth wave of innovation the framework begins with three basic enablers innovation flexibility and sustainability and explains how value from renewable energy technologies can be created and captured sustainably and innovatively with new market mechanisms implemented by firms with green business models

public education under capital mobility the paper considers a two country model of overlapping generations economies with intergenerational transfers motivated by altruism and investment in human capital we examine in a non stationary competitive equilibrium the optimal provision of education with and without capital market integration first we explore how regimes of education provision public private or mixed arise and how they affect the dynamics of autarkic economies second we study the effects of capital market integration in equilibrium on the optimal provision of education third we show that capital market integration enhances government intervention in the provision of public education to improve the welfare of its constituents and consider various solutions to such a competition

optimal gasoline tax in developing oil producing countries the case of mexico this paper uses the methodology of parry and small 2005 to estimate the optimal gasoline tax for a less developed oil producing country the relevance of the estimation relies on the differences between less developed countries ldcs and industrial countries we argue that lawless roads general subsidies on gasoline poor mass transportation systems older vehicle fleets and unregulated city growth make the tax rates in ldcs differ substantially from the rates in the developed world we find that the optimal gasoline tax is 1 90 per gallon at 2011 prices and show that the estimate differences are in line with the factors hypothesized in contrast to the existing literature on industrial countries we show that the relative gasoline tax incidence may be progressive in mexico and more generally in ldcs

estimates from a consumer demand system implications for the incidence of environmental taxes abstract most studies suggest that environmental taxes are regressive making them less attractive policy options we consider the distributional effects of a gasoline tax increase using four incidence measures and under three scenarios for gas tax revenue use to incorporate behavioral responses we use consumer expenditure survey data to estimate a consumer demand system that includes gasoline other goods and leisure our estimates confirm that when revenues are not recycled a gasoline tax is regressive use of incidence measures that ignore demand responses however will substantially overstate this regressivity in contrast the differences between the equivalent variation and easier to implement consumer surplus measures are relatively small in addition our results suggest that using the additional gas tax revenue to fund labor tax cuts makes the policy substantially less regressive while using the revenue to fund lump sum transfers actually makes it progressive

multi objective regulations on transportation fuels comparing renewable fuel mandates and emission standards 2015 elsevier b v we compare two types of fuel market regulations a renewable fuel mandate and a fuel emission standard that could be employed to simultaneously achieve multiple outcomes such as reduction in fuel prices fuel imports and greenhouse gas ghg emissions we compare these two types of regulations in a global context taking into account heterogeneity in carbon content of both fossil fuels and renewable fuels we find that although neither the ethanol mandate nor the emission standard is certain to reduce emissions relative to a business as usual baseline at any given level of biofuel consumption in the policy region a mandate relative to an emission standard results in higher ghg emissions smaller expenditure on fuel imports lower price of ethanol blended gasoline and higher domestic fuel market surplus this result holds over a wide range of values of model parameters we also discuss the implications of this result to a regulation such as the us renewable fuel standard given recent developments within the us such as increase in shale and tight oil production and large increase in average vehicle fuel economy of the automotive fleet

optimal control of externalities in the presence of income taxation a substantial literature examines second best environmental policy focusing particularly on how the pigouvian directive that marginal taxes should equal marginal external harms needs to be modified in light of the preexisting distortion due to labor income taxation additional literature is motivated by the possibility that distributive concerns should amend the internalization prescription it is demonstrated however that simple first best rules unmodified for labor supply distortion or distribution are correct in a natural basic formulation of the problem specifically setting all commodity taxes equal to marginal harms and subsidies equal to marginal benefits can generate a pareto improvement likewise a marginal reform in the direction of the first best can yield a pareto improvement qualifications and explanations for differences from previous work are also presented

does britain or the united states have the right gasoline tax this paper develops an analytical framework to assess the second best optimal level of gasoline taxation taking into account unpriced pollution congestion and accident externalities as well as interactions with the broader fiscal system we provide calculations of the optimal taxes for the us and the uk under a variety of parameter scenarios under our central parameter values the second best optimal gasoline tax is 1 01 gal for the us and 1 34 gal for the uk current tax rates are much lower than this in the us and higher in the uk the calculations are moderately sensitive to alternative parameter assumptions the congestion externality is the largest component in both nations revenue raising needs also play a significant role as do accident externalities and local air pollution potential welfare gains from reducing the current uk tax rate are estimated at nearly one fourth the production cost of all gasoline used in the uk even larger gains could be achieved by switching to a tax on vehicle miles with equal revenue yield for the us the welfare gains from optimizing the gasoline tax are smaller but those from switching to an optimal tax on vehicle miles are very large

exact consumer s surplus and deadweight loss consumer s surplus is a widely used tool in applied welfare economics both economic theorists and cost benefit analysis often use consumer s surplus despite its somewhat dubious reputation the basic idea is to evaluate the value to a consumer or his willingness to pay for a change in price of a good from say pricep to pricep because price changes affect consumer welfare an evaluation of this effect is often a key input to public policy decisions yet consumer s surplus is probably the most controversial of widely used economic concepts both paul samuelson and ian little conclude that the economics profession would be better off without it it is my feeling of the situation that substantial agreement exists on the correct quantities to be measured the amount the consumer would pay or would need to be paid to be just as well off after the price change as he was before the price change the quantities correspond to john hicks compensating variation measures an alternative measure which takes ex post price change utility as the basis of comparison is hicks equivalent variation the controversy arises in the measurement of these quantities the usual measurement procedure is to use the area to the left of the marshallian market demand curve between two price levels jules dupuit originated this measure of welfare change and alfred marshall and hicks derived appropriate conditions for its use the primary condition for the area to the left of the demand curve to correspond to the compensating variation is to have constant marginal utility of income marshall gave this condition and if it holds the same quantity will be derived as the area to the left of the compensated hicksian demand curve this area to the left of the compensated demand curve is exactly what the compensating variation and equivalent variation measure thus the constant marginal utility of income is a sufficient condition for marshallian consumer s surplus to be equal to hicks consumer s surplus in this case arnold harberger s plea to use the welfare triangle as one half times the product of the price change times the quantity change to measure deadweight loss corresponds to the correct theoretical amount of welfare change in a recent paper robert willig derives bounds for the percentage difference between the correct measure of either the compensating or equivalent variation and the marshallian measure derived form the market demand curve his bounds which depend on the income elasticity of demand for the single good in the region of price change being considered as well as the proportion of the consumer s income spent on the good demonstrate that the marshallian consumer s surplus is often a good approximation to hicks consumer s surplus the fact that the proportion of the consumer s income spent matters as well as the income elasticity was first pointed out by harold hotelling willig contends that the approximation error will be less than the errors involved in estimating the demand curve thus he hopes to remove the need for apology that applied economists often need to give to theorists who remark on the inappropriateness of using marshallian consumer s surplus to measure welfare change however in this paper i show that for the case primarily considered by willig of a single price change which is also the situation in which consumer s surplus is often used in applied work no approximation is necessary professor of economics massachusetts institute of technology and research associate national bureau of economic research i would like to thank peter diamond erwin diewert daniel mcfadden robert merton robert solow hal varian joel yellin and the referees for help and comments research support from the national science foundation is acknowledged the reason that we still have two rather than one of samuelson s six measures of consumer s surplus arises from an index number problem of the correct basis for the welfare comparison i will give both measures but plan to concentrate on the compensating variation

consumer responses to gasoline price and non price policies abstract gasoline consumption in emerging economies have been rising rapidly due to economic growth and increasing urbanization rate in recent years however the development has brought about new socio economic and environmental challenges leading governments to adopt various policies to control the trend although the impacts of price changes on gasoline consumption are well researched in the literature studies on different policies in a specific country is limited in this paper we investigate the impact of three distinct policies price reform rationing and fuel efficiency on consumer responses in iran we estimate price income and efficiency elasticities across household characteristics income groups and provinces using the aids model and the household expenditures data for the period 2005 2016 the results show that the average price elasticity is 76 however it varies across household characteristics time and space the price responses are greater in provinces neighbouring the countries with high price differentials and welfare losses of price reform are more sever for lower income families the estimated elasticities under different policy regimes show that energy price reform has led to significantly higher elasticities while rationing has led to decreased elasticities the more stringent efficiency regulation and increasing imports of fuel efficient cars have also increased elasticities

income distribution impacts of climate change mitigation policy in the susquehanna river basin economy we examine the cost side income distribution impacts of a carbon tax in the susquehanna river basin srb region of the united states utilizing a computable general equilibrium model we find the aggregate impacts of a 25 ton carbon tax on the srb economy are likely to be negative but modest an approximately one third of 1 reduction in gross regional product grp in the short run and double that amount in the long run however unlike many previous studies we find that the carbon tax is mildly progressive as measured by income bracket changes per capita equivalent variation and gini coefficient changes based on expenditure patterns the dominant factors affecting the distributional impacts are the pattern of output income and consumption impacts that affect lower income groups relatively less than higher income ones an increase in transfer payments favoring lower income groups and decreased corporate profits absorbed primarily by higher income groups

the economics of risks to life this study asks two questions 1 what is the net value to the representative individual over his life time of activities that alter age specific mortality risks 2 what is the cost to the representative individual of activities that take a life at random at a given age results derived from an economic demographic model with full age specific accounting have a strong actuarial flavor alterations in the mortality schedule caused say by a medical breakthrough should be assessed on the utility of expected additional life years production and reproduction less expected social costs of support loss of life at a specific age due to an accident say should be assessed on the opportunity costs of expected lost years of living lost production and reproduction less expected social support costs the results show that current methods in general leave out an important social transfer term that value of a life lost is highly age dependent and that the degree of diminishing returns to consumption is crucial in calculations of the economic cost of risks

market price and income elasticities of new vehicles demand recent evidence from aggregate models of automobile demand indicates that when not corrected for quality differences market price elasticity of demand is substantially biased downwards this note presents new information on market price and income elasticities derived from a disaggregate demand model that controls for cost household income vehicle attributes and perceived quality consumer search and manufacturer based on an extensive household survey of new vehicle purchasers in 1989 market price and income elasticities are estimated to be 0 87 and 1 70 respectively moreover excluding vehicle quality from a well specified model is found to have little effect upon the estimated market elasticities copyright 1996 by mit press

the costs of carbon sequestration a revealed preference approach increased concem by policy makers with the threat of global climate change has brought with it considerable attention to the possibility of encouraging the growth of forests as a means of sequestering carbon dioxide national academy of sciences nas 1992 james p bruce et al 1996 1 the kyoto protocol to the united nations framework convention on climate change 1997 which establishes emission reduction targets for the united states and other industrialized nations states that carbon sequestration can be used by participating nations to achieve their targets moreover even before the kyoto agreement this approach had become an explicit element of both u s and intemational climate policies u s department of energy 1991 united nations general assembly 1992 william j clinton and albert gore 1993 this high level of interest has been due in part to suggestions that sufficient lands are available to use the approach to mitigate a substantial share of annual carbon dioxide c02 emissions greg marland 1988 daniel a lashof and dennis a tirpak 1989 mark c trexler 1991 and claims that growing trees to sequester carbon is a relatively inexpensive means of combating climate change roger a sedjo and allen m solomon 1989 daniel j dudek and alice leblanc 1990 nas 1992 in other words the serious attention given by policy makers to carbon sequestration can partly be explained by implicit assertions about respective marginal cost functions i develop and demonstrate a method by which the costs of carbon sequestration can be estimated on the basis of evidence from landowners behavior when confronted with the opportunity costs of alternative land uses the simplest of previous economic analyses derived single point estimates of average costs associated with particular sequestration levels marland 1988 sedjo and solomon 1989 dudek and leblanc 1990 edwin s rubin et al 1992 omar masera et al 1995 often it has been assumed that land opportunity costs are zero g van kooten et al 1992 j k winjum et al 1992 new york state energy office 1993 robert k dixon et al 1994 another set of studies essentially engineering costing models has constructed marginal cost schedules by using information on revenues and costs of production for altemative uses on representative types or locations of land and then sorting these in ascending order of cost robert j moulton and kenneth r richards 1990 richards et al 1993 simulation models include a model of the lost profits due to removing land from agricultural production peter j parks and ian w hardie 1995 a mathematical programming model of the agricultural sector and the timber market richard m adams et al 1993 a related model incorporating the effects of agricultural price support programs j m callaway and bruce mccarl 1996 and a dynamic simulation model of forestry susan swinehart 1996 lastly an analysis by andrew j plantinga 1995 adopts land use elasticities from an econometric study to estimate sequestration costs we draw on some of the best features of the previous studies including the carbon levelization method of moulton and richards john f kennedy school of government harvard university 79 john f kennedy street cambridge ma 02138 and resources for the future richard newell supplied excellent research assistance and valuable comments on a previous version were provided by lawrence goulder william nordhaus andrew plantinga kenneth richards two anonymous referees participants in seminars at the universities of california at los angeles and santa barbara the university of maryland the university of michigan the university of texas harvard university stanford university yale university resources for the future and the national bureau of economic research the author alone is resdonsible for any errors 1 after fossil fuel combustion deforestation is the second largest source of carbon dioxide emissions estimates of annual global emissions from deforestation range from 0 6 to 2 8 billion tons compared with slightly less than 6 0 billion tons annually from fossil fuel combustion cement manufacturing and natural gas flaring combined r a houghton 1991 t m smith et al 1993

marginal reductions in vehicle emissions under a dual blend ethanol mandate evidence from a natural experiment among the many reasons policy makers across the world have sought to supplement fuel supplies with ethanol blended fuels are the cited environmental benefits that come with replacing a fossil fuel with a cleaner burning alternative dual blend ethanol mandates in which multiple ethanol blends are simultaneously available are one way policy markers can move forward with more aggressive mandates more quickly the recent ethanol mandate in the state of new south wales australia offers a unique natural experiment to quantify the potential environmental benefits and costs of a dual blend ethanol policy this paper estimates the impact on carbon dioxide co2 emissions from road activity that are attributable to the implementation of the new south wales ethanol requirements we find that there was a decrease in emissions due to the policy but that the decrease is relatively minor given the size of the market and that it comes at a high cost the cost was over 1200 per ton of carbon to reduce gasoline emissions by just 1 2

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

an indirect utility model of car ownership and private car use abstract in this paper a model is developed for the simultaneous determination of private car ownership and private car use measured as the annual number of kilometers this model is a micro economic utility model in which the fixed and variable car costs enter through the budget restriction this allows us to do micro simulations of increasing those costs which is a policy issue in the netherlands it turns out that in this model both fixed and variable car costs are effective measures for reducing traffic growth the former working primarily through decreasing car ownership levels the latter having a more direct effect on car use

the indirect land use impacts of united states biofuel policies the importance of acreage yield and bilateral trade responses recent work has highlighted agricultural land conversion as a significant debit in the greenhouse gas accounting of ethanol as an alternative fuel this work has at the same time sparked considerable debate on the role of crop yield growth as a means of avoiding rapid land conversion we examine the agricultural land use impacts of mandate driven ethanol demand increases in the united states in a formal economic equilibrium framework which allows us to examine the importance of yield price relationships we find that the standard assumption of trend yield growth is likely restrictive for analysis of equilibrium response to significant demand increases for fuel feedstocks furthermore we identify both the acreage response and bilateral trade specification of a multi country model as important sources of variability in terms of parametric uncertainty in predicting global land use change from the biofuels boom

the impact of energy prices on the volatility of ethanol prices and the role of gasoline emissions abstract the contribution of renewable energy resources is vital for a country s economic growth by providing high efficiency in energy as well as an effective tool for the confrontation of climate change in particular concerning the eu an increase in the consumption of renewable energy resources as a proportion of the total energy consumption by its member states was set as an objective until 2020 ethanol has been widely used as a substitute to conventional energy like gasoline and oil the present paper surveys the role of alternative energy prices and gas emissions in the formation of the ethanol prices the results of the empirical survey confirmed the existence of a sole relationship among the variables employed according to the results obtained an increase in the volume of emissions or in gasoline prices results in an increase in ethanol prices while the opposite is confirmed in the case of crude oil he elasticity of ethanol prices to the increase of the emissions is another result worth mentioning indicative of the significant role of the emissions in the formation of ethanol prices

the cost of reducing gasoline consumption high nominal gas prices new awareness of threats to national security and growing concern about global warming have reignited discussion of ways to reduce gasoline consumption in the united states debate centers on changing two policies already in place the federal gas tax and corporate average fuel economy cafe standards two influential recent reports find that increasing the gas tax would attain a given reduction in gas consumption at lower cost than would tightening cafe standards national research council 2002 congressional budget office 2003 the gas tax has this advantage because it encourages not just increases in fuel efficiency but also reductions in miles driven in contrast cafe standards actually encourage more driving because increases in fuel efficiency reduce the cost of gas per mile driven we also compare the costs of the gas tax and cafe standard but take into account interactions with preexisting tax distortions many papers examine the effects of these tax interactions in other contexts but to our knowledge none of them considers the cafe standard see e g lars bovenberg and ruud de mooij 1994 ian parry 1995 lawrence goulder 1995 bovenberg and goulder 1996 parry et al 1999 don fullerton and gilbert metcalf 2001 these interactions reduce the cost of the gas tax but increase the cost of cafe thus expanding the cost advantage enjoyed by the gas tax this difference does not arise because the gas tax raises revenue while the cafe standard does not rather this result is similar to that in west and williams 2004a which showed that since gasoline and leisure are relative complements raising the gas tax will increase labor supply generating additional efficiency gains in this paper we estimate a consumer demand system using data from the consumer expenditure survey and the california air resources board and find that miles driven and leisure are relative complements thus the gas tax encourages labor supply by raising the cost per mile driven producing an additional efficiency gain conversely because cafe reduces the cost per mile it discourages labor supply and yields an additional efficiency loss while the induced changes in labor supply are tiny relative to the labor market they are still substantial relative to the gas market and thus have a dramatic effect on the relative costs of the two policies our point estimates imply that they reduce the social marginal cost of the gas tax starting from the status quo gas tax rate and ignoring the benefits of reduced gas consumption by almost 30 percent while increasing the marginal cost of cafe by nearly 60 percent this result implies that the case for raising the gas tax rather than tightening the cafe standard is far stronger than previous studies suggest indeed it strongly suggests that any tightening at all of the cafe standard would lower welfare unless the benefits of reduced gas consumption have been seriously underestimated

estimating maximum land use change potential from a regional biofuel industry abstract the maximum amount of land for growing switchgrass for ethanol is estimated for a region in the southeastern u s breakeven capacities are calculated for land in row crops hay pasture and marginal land characteristics of land categories inform potential land use change impacts as well as switchgrass profitability variable yields within and across land categories are translated into distributions of switchgrass net revenue breakeven curves are generated for a range of switchgrass prices these curves provide upper bounds for further analysis of actual switchgrass adoption in context of broader economic forces and possible policy mechanisms to minimize environmental impacts a farm gate price of 55 mg 1 is estimated for half of marginal and pasturelands to break even with switchgrass at this price only 20 of land in hay and a small fraction of row crop hectares break even half of hay and row crops hectares break even at approximately 90 mg 1 and 100 mg 1 respectively at 60 mg 1 sufficient land area can profitably produce switchgrass for ethanol to displace approximately 10 of gasoline consumed in georgia north carolina and south carolina however this price only indicates breakeven capacity implying that higher prices may be necessary to realize 10 displacement

a bayesian sampling approach to measuring the price responsiveness of gasoline demand using a constrained partially linear model partial linear models provide an intuitively appealing way to examine gasoline demand because one can examine how response to price varies according to the price level and people s income however despite their intuitive appeal partial linear models have tended to produce implausible and or erratic price effects blundell et al 2012 propose a solution to this problem that involves using slutsky shape restrictions to improve the precision of the nonparametric estimate of the demand function they propose estimating a constrained partially linear model through three steps where the weights are optimized by minimizing an objective function under the slutsky constraint bandwidths are selected through least squares cross validation and linear coefficients are estimated using profile least squares a limitation of their three step estimation method is that bandwidths are selected based on pre estimated parameters we improve on the blundell et al 2012 solution in that we derive a posterior and develop a posterior simulation algorithm to simultaneously estimate the linear coefficients bandwidths in the kernel estimator and the weights imposed by the slutsky condition with our proposed sampling algorithm we estimate a constrained partially linear model of household gasoline demand employing household survey data for the united states for 1991 and 2001 and for canada for 2006 2009 and find plausible price effects

winning or losing from dynamic bottleneck congestion pricing the distributional effects of road pricing with heterogeneity in values of time and schedule delay abstract this paper analyses the efficiency and distributional impacts of congestion pricing in vickrey s 1969 dynamic bottleneck model of congestion allowing for continuous distributions of values of time and schedule delay we find that congestion pricing can leave a majority of travellers better off even without returning the toll revenues to them we also find that the consumer surplus losses or gains from tolling are not strictly monotonic in the value of time because they also depend on the value of schedule delays the greatest losses are not incurred by drivers with the lowest value of time but by users with an intermediate value of schedule delays and the lowest value of time for that value of schedule delays for second best pricing with an untolled alternative the pattern of distributional effects is quite similar to that for first best pricing in contrast with results from prior static models users who are indifferent between the two alternative routes are not the ones who gain least from this type of second best pricing our results suggest that in assessing the distributional impacts of road congestion pricing it is important to take into account both the distribution of the value of time and of the value of schedule delays as well as the dynamics of departure time choice

heterogeneity in the rebound effect further evidence for germany rebound effects measure the behaviorally induced offset in the reduction of energy consumption following efficiency improvements using both panel estimation and quantile regression methods on household travel diary data collected in germany between 1997 and 2009 this study investigates the heterogeneity of the rebound effect in private transport with the average rebound effect being in the range of 57 to 62 our results are in line with a recent german study by frondel peters and vance 2008 but are substantially larger than those obtained from other studies furthermore our quantile regression results indicate that the magnitude of estimated fuel price elasticities from which rebound effects can be derived depends inversely on the household s driving intensity households with low vehicle mileage exhibit fuel price elasticities and hence rebound effects that are significantly larger than those for households with high vehicle mileage

cost effectiveness of alternative green payment policies for conservation technology adoption with heterogeneous land quality this paper quantitatively analyses the cost effectiveness of alternative green payment policies designed to achieve a targeted level of pollution control by heterogeneous microunits these green payment policies include cost share subsidies that share the fixed costs of adoption of a conservation technology and or input reduction subsidies to reduce the use of a polluting input the paper shows that unlike a pollution tax that achieves abatement through three mechanisms a negative extensive margin effect a negative intensive margin effect and a technology switching effect a cost share subsidy and an input reduction subsidy are much more restricted in the types of incentives they provide for conservation of polluting inputs and adoption of a conservation technology to control pollution moreover they may lead to varying levels of expansion of land under production costs of abatement with alternative policies and implications for production and government payments are compared using a simulation model for controlling drainage from irrigated cotton production in california with drip irrigation as a conservation technology

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

disaggregate analysis of the demand for gasoline in this paper we adopt a disaggregate approach to modelling the components of gasoline demand gasoline demand in our model is viewed as the outcome of the fol lowing household decisions vehicle holdings number and type and vehicle usage non discretionary and discretionary usage modelling gasoline demand in this way correctly specifies gasoline as an input into the production of transportation services and allows for the interdependence between household decisions on vehicle holdings and usage moreover estimation of the components of gasoline demand allows policy makers to identify the means by which individuals will respond to policy changes this leads to more effective policies designed to reduce gasoline consumption we use this model to estimate price and fuel efficiency elasticities of vehicle usage and gasoline demand

new car sales and used car stocks a model of the automobile market this article develops a short run general equilibrium model of the automobile market by combining a discrete choice model of consumer automobile demand with simple models of new automobile production and used vehicle scrappage the theoretical model allows an unlimited degree of heterogeneity of both consumers and automobiles with equilibrium defined as aggregate demand equal to supply for every vehicle type econometric estimates of the scrappage and demand functions are then used to create a simulation model of the automobile market which is used to provide forecasts of automobile sales stocks and scrappage for the 1978 1990 period

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

optimal control of externalities in the presence of income taxation optimal control of externalities a substantial literature examines second best environmental policy focusing particularly on how the pigouvian directive that marginal taxes should equal marginal external harms needs to be modified in light of the preexisting distortion due to labor income taxation additional literature is motivated by the possibility that distributive concerns should amend the internalization prescription it is demonstrated however that simple first best rules unmodified for labor supply distortion or distribution are correct in a natural basic formulation of the problem specifically setting all commodity taxes equal to marginal harms and subsidies equal to marginal benefits can generate a pareto improvement likewise a marginal reform in the direction of the first best can yield a pareto improvement for other reforms a simple efficiency test characterizing when a pareto improvement is possible is offered qualifications and explanations for the substantial departure from results in previous work are also elaborated

gasoline demand and car choice estimating gasoline demand using household information in recent years calls for carbon taxes as a policy tool to combat global warming have kept a discussion of the price and income elasticities of gasoline demand alive to date gasoline demand elasticity estimates are almost exclusively based on aggregate data that are subject to aggregation problems and make distributional concerns impossible to address by using household level data from the panel study of income dynamics psid and imputed fuel efficiency measures and gasoline prices i estimate household demand for gasoline and the corresponding price and income demand elasticities an attempt is made to include data on the car stock in the estimation since car portfolio and gasoline demand decisions are closely related empirical results from a selection corrected gasoline demand regression suggest low short run price and income elasticities and clear differences in gasoline demand across the population these results suggest that a gasoline tax is not likely to result in large decreases in gasoline consumption while potentially imposing hardship on identifiable segments of the population

regulating automobile pollution under certainty competition and imperfect information abstract this paper studies an integrated economic model of automobile emissions that incorporates consumer mileage automobile feature and fuel content choices subject to informational constraints that bind the government optimal regulatory policies are shown to include fuel content standards gasoline taxes and direct automobile regulation or taxation optimal automobile taxes are tied to the mileage that regulators can anticipate will be driven on a given car in dynamic environments constrained efficiency can be achieved by periodic automobile taxes or under some circumstances a combination of new car regulation and accelerated vehicle retirement subsidies desired properties of vehicle retirement programs are discussed

voting for environmental policy under income and preference heterogeneity we examine the design of policies for promoting the consumption of green products under preference and income heterogeneity using organic food products as an example two instruments are considered a price subsidy for the organic food products and a tax on the conventional products under income disparity consumers with high income always prefer a socially optimal subsidy to a socially optimal tax while low income consumers prefer a tax on conventional products when environmental policy is determined by the median voter the policies implemented tend to be stricter than socially optimal policies if income differences are large

gasoline price and new vehicle fuel efficiency evidence from canada abstract using data on all new vehicles registered in canada from 2000 to 2010 we estimate the elasticity of the fuel economy of the new vehicle stock with respect to gasoline price we find that a 10 increase in gasoline price causes a 0 8 improvement in the fuel economy of new vehicles however we also show that consumers respond much more strongly to fuel taxes than to other components of the gasoline price finally we provide evidence that consumers in dense urban areas are more responsive to changes in fuel prices than consumers living on the urban periphery

the incidence of fuel taxation in india abstract fuel taxes have returned to centre stage as a potential policy instrument for greenhouse gas abatement on the basis of some studies in developed countries critics have complained that a fuel tax would be regressive this paper uses data from a representative household survey covering more than 124 thousand indian households to examine this claim it finds that a fuel tax would be progressive as would a carbon tax using an input output approach it is found that the progressivity results holds good even when one considers indirect consumption of fuel through its use as an intermediate input sensitivity checks allowing for differing price elasticities of demand between rich and poor confirm this result for most of fuels a tax on kerosene is the only fuel tax that is regressive in all situations

economy wide rebound effects for non energetic raw materials material efficiency is increasingly being seen as a means to save resources and achieve greater security of supply whether these aims can be achieved to the desired extent depends among other things on the presence of rebound effects this article estimates economy wide rebound effects for non energetic raw materials in the context of a set of material efficiency projects carried out in germany under the assumption that the efficiency technologies developed in these projects are scaled up to the national level input output analysis is used to calculate changed material requirements and corresponding rebound effects reduced material flows in monetary terms together with economic data are aggregated to an economy wide impulse which can cause re increases in the demand for the considered raw materials depending on the project specific framework conditions and subject to the modeling assumptions our estimates suggest that individual materials display a wide range of rebound effects ranging from close to zero to low double digit percentages these results point towards the conclusion that economy wide rebound effects do not make these efficiency measures obsolete however they also suggest that rebound effects should not be ignored in the assessment of the role of efficiency in future resource consumption

biofuel economics in a setting of multiple objectives unintended consequences this paper examines biofuels from an economic perspective and evaluates the merits of promoting biofuel production in the context of the policies multiple objectives life cycle implications pecuniary externalities and other unintended consequences the policy goals most often cited are to reduce fossil fuel use and to lower greenhouse gas emissions but the presence of multiple objectives and various indirect effects complicates normative evaluation to address some of these complicating factors we look at a several combinations of policy alternatives that achieve the same set of incremental gains along the two primary targeted policy dimensions making it possible to compare the costs and cost effectiveness of each combination of policies for example when this approach is applied to u s produced biofuels they are found to be 14 31 times as costly as alternatives like raising the gas tax or promoting energy efficiency improvements the analysis also finds the scale of the potential contributions of biofuels to be extremely small in both the u s and eu mandated u s corn ethanol production for 2025 reduces u s petroleum input use by 1 75 and would have negligible net effects on co2 emissions and although eu imports of brazilian ethanol may look better given the high costs of other alternatives this option is equivalent at most to a 1 20 reduction in eu gasoline consumption

do high oil prices matter evidence on the mobility behavior of german households focusing on travel survey data from germany this paper investigates the determinants of automobile travel with the specific aim of quantifying the effects of fuel prices and fuel economy the analysis is predicated on the notion that car mileage is a two stage decision process comprising the discrete choice of whether to own a car and the continuous choice of distance traveled to capture this process we employ censored regression models consisting of probit and ols estimators which allows us to gauge the extent to which sample selectivity may bias the results our elasticity estimates indicate a significant positive association between increased fuel economy and increased driving and a significantly negative fuel price elasticity which ranges between 35 and 41 taken together these results suggest that fuel taxes are likely to be a more effective policy measure in reducing emissions than fuel efficiency standards

lose some save some obesity automobile demand and gasoline consumption abstract this paper examines the unexplored link between the prevalence of overweight and obesity and vehicle demand in the united states exploring annual sales data of new passenger vehicles at the model level in 48 u s counties from 1999 to 2005 we find that new vehicles demanded by consumers are less fuel efficient on average as a larger share of people become overweight or obese the ols results show that a 10 percentage point increase in obesity and overweight reduces the average mpg of new vehicles demanded by 1 4 percent an effect requiring a 12 cent increase in gasoline prices to counteract the 2sls results after controlling for possible endogeneity in overweight and obesity prevalence put those two numbers at 5 percent and 54 cent respectively these findings robust to a variety of specifications suggest that policies to reduce overweight and obesity can have additional benefits for energy security and the environment

distributional impacts of car road pricing settlement structures determine divergence across countries abstract social questions of distribution and equity are of major importance for the political acceptance of car road pricing the argument that kilometre based private vehicle charging disadvantages the poor is often the core reason for opposing its introduction an article in this journal steininger k w friedl b gebetsroither b 2007 sustainability impacts of car road pricing a computable general equilibrium analysis for austria ecological economics 63 pp 59 69 proved the opposite for one european country i e that the rich bear most of the burden in the present paper we use the very same model structure and apply it in a simulation to the data of another country while macroeconomic and environmental conclusions are similar we find a different distributional impact of car road pricing in our case this issue is also of relevance in the analysis of the distributional implications concerning recently significant gasoline price increases

analyzing co2 emissions from passenger cars in europe a dynamic panel data approach abstract road transport accounts for 92 per cent of co2 emissions from all transport services and car transport makes the largest contribution to the total we examine the dynamic relationship between car co2 emissions in western european union countries eu 13 with the dieselization of the passenger vehicle fleet technological progress fuel efficiency mobility indicator economic activity and motorization rate we take advantage of a panel data set of 13 eu countries between 1990 and 2015 and estimate a dynamic panel data dpd model using alternative econometric methods this approach allows us to estimate the effect on car co2 emissions of induced indirect channels involving the reaction of economic agents to changes in aforementioned explanatory variables we provide evidence that co2 emissions have been benefited from global technological progress and changes in average fuel efficiency while increases of economic activity motorization rate and the dieselization process hold positive and significant relationship with car co2 emissions these results are consistent with alternative model specifications and econometric methods

hidden regimes and the demand for carbon dioxide from motor gasoline abstract perhaps the most tactile source of anthropogenic carbon dioxide co2 emissions stem from vehicle use because consumers are well aware of their price and quantity decisions it is likely that consumer demand for co2 emissions from motor gasoline are quite responsive to the overall state of the economy using a structurally identified markov switching demand model i find that co2 emissions respond asymmetrically to changes in income and the price of gasoline in expansionary and contracting states of the economy the findings of this paper indicate that flexible policy instruments have the potential to mitigate undue burden on consumers and producers compared to their static counterparts

distributional effects of alternative vehicle pollution control policies abstract previous work shows that policies that subsidize new vehicles and tax size miles or gasoline efficiently reduce pollution less is known about their distributional effects this paper examines distributional effects by estimating the joint demand for vehicles and miles using the consumer expenditure survey greater price responsiveness among low income households enhances progressivity of gas or miles taxes across lower incomes and mitigates regressivity across upper incomes taxes on engine size or subsidies to new vehicles are significantly more regressive than gas or miles taxes

support and opposition to a pigovian tax road pricing with reference dependent preferences abstract loss aversion can affect support and opposition to pigovian taxes to reduce externalities this paper studies road pricing with reference dependent preferences modeled by a linear gain loss utility function given this specification we find that the socially optimal road toll is smaller than the optimal toll in the absence of reference dependence and it declines in the degree of loss aversion loss aversion can also explain the empirical observation that support for road pricing is lower before than after its introduction we further show that loss aversion may increase or reduce lobbying efforts by driver organizations against the introduction of tolling it will increase lobbying if a high toll is proposed but drivers initially believe that the probability that it will be introduced is small lastly loss aversion unambiguously reduces lobbying by organizations of non drivers representing for example environmentalists or public transport users in favor of the introduction of a toll