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NBER Working Papers and Publications
|February 2013||The Welfare Impact of Indirect Pigouvian Taxation: Evidence from Transportation|
with Christopher R. Knittel: w18849
A basic tenet of economics posits that when consumers or firms don't face the true social cost of their actions, market outcomes are inefficient. In the case of negative externalities, Pigouvian taxes are one way to correct this market failure, where the optimal tax leads agents to internalize the true cost of their actions. A practical complication, however, is that the level of externality nearly always varies across economic agents and directly taxing the externality may be infeasible. In such cases, policy often taxes a product correlated with the externality. For example, instead of taxing vehicle emissions directly, policy makers may tax gasoline even though per-gallon emissions vary across vehicles. This paper estimates the implications of this approach within the personal transport...
|September 2011||Carbon Prices and Automobile Greenhouse Gas Emissions: The Extensive and Intensive Margins|
with Christopher R. Knittel
in The Design and Implementation of U.S. Climate Policy, Don Fullerton and Catherine Wolfram, editors
|Cleaning the Bathwater with the Baby: The Health Co-Benefits of Carbon Pricing in Transportation|
with Christopher R. Knittel: w17390
Efforts to reduce greenhouse gas emissions in the US have relied on Corporate Average Fuel Economy (CAFE) Standards and Renewable Fuel Standards (RFS). Economists often argue that these policies are inefficient relative to carbon pricing because they ignore existing vehicles and do not adequately reduce the incentive to drive. This paper presents evidence that the net social costs of carbon pricing are significantly less than previous thought. The bias arises from the fact that the demand elasticity for miles travelled varies systematically with vehicle emissions; dirtier vehicles are more responsive to changes in gasoline prices. This is true for all four emissions for which we have data--nitrogen oxides, carbon monoxide, hydrocarbon, and greenhouse gases--as well as weight. This reduces...
|October 2010||Carbon Prices and Automobile Greenhouse Gas Emissions: The Extensive and Intensive Margins|
with Christopher R. Knittel: w16482
The transportation sector accounts for nearly one third of the United States' greenhouse gas emissions. While over the past number of decades, policy makers have avoided directly pricing the externalities from vehicles, both in terms of global and more local pollutants and Corporate Average Fuel Standards have changed little since the mid-1980s, there is now considerable interest in reducing greenhouse gas emissions form the transportation sector. Many have argued that the unique features of the sector imply that pricing mechanisms would have little affect on emissions. This paper analyzes how pricing carbon through either a cap and trade system or carbon tax might affect greenhouse gas emissions from the transportation sector by estimating how changes in gasoline prices alter consumer be...
Published: Carbon Prices and Automobile Greenhouse Gas Emissions: The Extensive and Intensive Margins, Christopher R. Knittel, Ryan Sandler. in The Design and Implementation of U.S. Climate Policy, Fullerton and Wolfram. 2012