NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Designing Policies to Make Cars Greener: A Review of the Literature

Soren T. Anderson, James M. Sallee

NBER Working Paper No. 22242
Issued in May 2016
NBER Program(s):   EEE

We review what is known about the economic efficiency of fuel taxes relative to efficiency standards aimed at mitigating environmental externalities from automobiles. We present a simplified model of car choice that allows us to emphasize the relationships between fuel economy, other car attributes, and miles traveled. We focus on greenhouse gas emissions, although we note how other environmental externalities affect our conclusions. Our main conclusion—that standards are substantially less efficient than a fuel tax—is already familiar. Less familiar are points we make about the relative importance of the rebound effect, on the effects of attribute-based policies, and the implications of behavioral biases. We point to areas where we believe future research can have the greatest contribution, including work on uncertainty, heterogeneity, and empirical work in low and middle-income countries.

You may purchase this paper on-line in .pdf format from SSRN.com ($5) for electronic delivery.

Access to NBER Papers

You are eligible for a free download if you are a subscriber, a corporate associate of the NBER, a journalist, an employee of the U.S. federal government with a ".GOV" domain name, or a resident of nearly any developing country or transition economy.

If you usually get free papers at work/university but do not at home, you can either connect to your work VPN or proxy (if any) or elect to have a link to the paper emailed to your work email address below. The email address must be connected to a subscribing college, university, or other subscribing institution. Gmail and other free email addresses will not have access.

E-mail:

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w22242

Published: Soren T. Anderson & James M. Sallee, 2016. "Designing Policies to Make Cars Greener," Annual Review of Resource Economics, vol 8(1).

Users who downloaded this paper also downloaded* these:
Borenstein w19044 A Microeconomic Framework for Evaluating Energy Efficiency Rebound And Some Implications
Jacobsen, Knittel, Sallee, and van Benthem w22063 Sufficient Statistics for Imperfect Externality-Correcting Policies
Anderson, Kellogg, and Sallee w16974 What Do Consumers Believe About Future Gasoline Prices?
Kotchen w22246 Which Social Cost of Carbon? A Theoretical Perspective
Chen and Zeckhauser w22240 Collective Action in an Asymmetric World
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us