Four Papers On Transportation And The Environment

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The main essay of this thesis, found in the first chapter, examines how two policies that are a priori equivalent, fuel economy standards and feebates, interact differently with complementary policies that also attempt to improve fuel economy. To examine these interactions I build a general equilibrium model of the automobile market that allows manufacturers to trade off horsepower, weight, and fuel economy of vehicles along a production possibility frontier (PPF). I also estimate household demand for vehicles and miles for a simulation model that includes the used car and scrappage markets. This model allows me to simulate the interaction of a research and development policy that increases the PPF of domestic firms, or a tax credit that increases demand for efficient vehicles, with either a CAFE standard or feebate. I find that vehicle emissions increase under all these interactions but the effects are muted under the feebate because it allows fuel economy to improve by 0.60% to 1.88%, while CAFE, by targeting an average fuel economy, will always offset these uncoordinated complementary policies. The second essay examines transportation systems with unpriced congestion where single-occupant low-emission vehicles are allowed into high occupancy vehicle (HOV) lanes to encourage their adoption exacerbates congestion costs for carpoolers. The resulting welfare effects of the policy are negative, with environmental benefits overwhelmingly dominated by the increased congestion costs. Exploiting the introduction of the Clean Air Vehicle Stickers policy in Cal- ifornia with a regression discontinuity design, our results imply a best-case cost of $124 per ton of reductions in greenhouse gases, $606,000 dollars per ton of nitrogen oxides reduction, and $505,000 dollars per ton of hydrocarbon reduction, exceeding those of other options readily available to policymakers. The third essay examines the 'Energy Paradox.' From previous literature, it can be found that consumers tend to undervalue discounted future energy costs in their purchase decisions for energy-using durables. We show that this finding could, in part, result from ignoring consumer heterogeneity in empirical analyses as opposed to true undervaluation. The fourth essay examines used vehicle scrappage rates. We find that not only are vehicles lasting longer but that scrap rates are less responsive to changes in vehicle price than previously estimated. These parameters help to refine the parameters used to evaluate public policies like CAFE standards and gasoline taxes that are known to have important effects on used vehicles.

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CAFE; Environment; Automobiles


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Bento, Antonio Miguel R.

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Coate, Stephen
Freedman, Matthew

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Ph. D., Economics

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Doctor of Philosophy

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dissertation or thesis

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