Enviromental policies for transportation Flashcards
is transport a main contributor to air pollution?
yes, road transport is the primary responsible for emissions of air pollutants
how many people are exposed to traffic noise higher than 65db?
110 mn individuals according to OCED(1991)
CONSIDERED UNACCEPTABLE
how can noise pollution affection someone
negative effects:
- sleep
- stress
- hearing
studies show properties exposed to noise lose 0.58 of their market value every additional decibel
what is an externality?
an acitivity generates an cost to a third party, which is not internalized by the agent
what are the three main types of externalities from car travel
Congestion: cost to other drivers is time
pollution: cost to residents in the area of the trip
noise: cost to residents in the area of the trip
can transport related externalites be positive
yes, if residents like the looks of super cars driving by, this is a benefit which isnt incurred by the driver
describe the basic model of externalities
draw a diagram
what is the issue here?
V = traffic flow e.g. quantites of car on a specific road B(V)= represents total value/ benefit user gain from trips d(V) = willingness to pay for an additional trip
c(V) = a
cost of a trip, where a is costant (dont depend on traffic
volume) (horiozntal line)
- DONT INCLUDE CONGESTION
Market.equ –>d(V)=a
what are the 2 categories of instruments the government can use to correct externalties
market based instruments
- affect the price of triving or emissions
command and control instruments:
- directly impose limits on the quantity of driving or emission per milt
whats an example of a market based policy for correcting externalities
-Fueltaxes
•Tradable permits
•Tolls/emissions charges
whats an example of a command and control policy for correcting externalities
- Vehicle emission standards
- Low emissions zones
- Fuel standards (phasing out of lead)
- Traffic restrictions (e.g.alternate license plates)
what do economists believe in terms of trading permits
economists see externalities stemming from absence of property
- driviers are not liable for the damge of bystanders produced by car emissions
- sufferers cant claim compensation
what would happend to residants if they had a right not to be exposed to pollutants
- they would collect compensation for the damage from emissions from drivers
- drivers internalize cost of the damage to residents
what would happen if drivers had the right to drive and produce emissions as much as they want
- residents would pay them for every unit of avoided emissions
- drivers internalize the external cost of emissions –> they lose out on money by driving more
who was the researcher who proposed property rights to solve externalities
Coase 1960
issues:
- collecting payment from 1 party for the other
what is the model of property rights
Assume: - 1 mile road and 2 inviduals - a driver and a resident V = quanity of polluting emissions in the areas --> 1db of noise per mile -------------------------------- e(V) = external cost to resd'ts B(v) = benefits driver gets by dribing private cost = a -------------------------
in model of property rights: what would MEC represent
MEC = cost of a additional unit of emisions to the resident –> how much the resident would pay to AVOID one more unit of emission
in model of property rights: what would d(V) represent
benefit of additional mile for the driver –> how much the driver would value one more mile
draw the property rights diagram
analyse?
what would happen to V if there arent in equ
d(V)-a>MEC:
- driving willing to pay more for an extra trip than the compensation
- V would increase
d(V)-a
what is a cap and trade scheme
proposed by Coase
- set a target level of emissions
- grants right to emit to pollutuers
- those who exceed permit must buy another one
give an example of a cap and trade scheme
u emissions trading system
- covers more than 45% emissions in the EU
- PERMITS are allocated through direct trading and auctions
why are market based solutions hard to implement?
- to reach equ the 2 parties must be able to trade without transactions costs
COSTS: - enforcement: ensure drivers pay
- measuring driver emissiosn
PARTIES MUST BE PRICE TAKERS - uber is a price maker –> so it would not work
By allocating property rights and letting polluters and victims trade rights to emissions, the government.
can achieve an efficient level of emissions, provided transaction costs are negligible
what is a pigouvian tax
carbon taxes
- government takes responsibility over the environmentand charge a price for any activity that harms it
what is the model of of a pigouvian tax
government sets a tax =t
so a driver f(x) would be
d(v)-(a+t)V
draw a diagram representing a pigouvian tax
MEC = t
- ensure all drivers choose optimal level miles(quantity)
pigou vs permits
less contraversial: polluters buy the right to emissions from the GOV not private individials (residents)
- still important to measure emssions and enforce tax (implementation cost resoures)
real life example of a pigouvian tax
hydrocarbon oil duty: introduced in 1909
- created 27.1 billion pounds which is 1.5% og GDP
Pigouvian taxation of polluting activities
requires a careful evaluation of the damages from pollution and the benefits from polluting activities
what are command and control measures
not all policies reduce car related externlities
- limit quantity of miles directly
example of a command and control measure
London low emission zone
- charge of 200£ per day to lorries over 12 tonnes
- it acts as a ban –> extended to smaller lorries and vans
- 5£ for polluting vehicles like diesel cars
what is registration based rationing
Driving restriction
- few vehicles are allowed to drive
- rationed by the last number of a plate
- —- use in Milan and Paris
disadvantage of driving restrictions
- driving is not given to drivers with the highest benefit/ highest willingness to pay
- no revenue for the government
advantages of driving restrictions
more equitable –> random allocation doesnt depend on ability to pay
- driving is not reserved to the rich –> can easily afford it
ompared to command and control policies, market based activities have the advantage of…
allocating polluting activities (e.g. driving) to the individuals who value them the most
Mexico implement driving restrictions, what were the results
no increase in public transport usage
- people would buy 2 cars with varying number playtes –> new vehicles sales increased by 15%
uninteded consequence
- cheaper cars means less efficient –> more pollutants per mile
