Working Paper: NBER ID: w15904
Authors: Maureen L. Cropper; Yi Jiang; Anna Alberini; Patrick Baur
Abstract: Ground-level ozone remains a serious problem in the United States. Because ozone non-attainment is a summer problem, episodic rather than continuous controls of ozone precursors are possible. We evaluate the costs and effectiveness of an episodic scheme that requires people to buy permits to drive on high-ozone days. We estimate the demand function for permits based on a survey of 1,300 households in the Washington, DC, metropolitan area. Assuming that all vehicle owners comply with the scheme, the permit program would reduce volatile organic compounds (VOCs) by 50 tons and nitrogen oxides (NOx) by 42 tons per Code Red day at a permit price of $75. Allowing for non-compliance by 15 percent of respondents reduces the effectiveness of the scheme to 39 tons of VOCs and 33 tons of NOx per day. The cost per ozone season of achieving these reductions is approximately $9 million (2008 USD). This compares favorably with permanent methods of reducing VOCs that cost $645 per ton per year.
Keywords: Episodic Pollution Control; Permit System; Ozone Precursor Emissions; Cost-Effectiveness
JEL Codes: Q52; Q53; Q58
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| permit price (D41) | likelihood of purchasing a permit (R48) |
| permit price (D41) | demand for permits (R48) |
| demand for permits (R48) | emissions reductions (Q52) |
| permit price (D41) | emissions reductions (Q52) |
| noncompliance rate (H26) | effectiveness of emissions reductions (Q52) |
| miles driven (R48) | demand for permits (R48) |
| permit pricing (D49) | cost-effectiveness of the scheme (D61) |