In transportation systems with unpriced congestion, allowing single-occupant low-emission vehicles in 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 California with a regression discontinuity design, our results imply a best-case cost of $124 per ton of reductions in greenhouse gases, $606,000 per ton of nitrogen oxides reduction, and $505,000 per ton of hydrocarbon reduction, exceeding those of other options readily available to policymakers.
Bento, Antonio, Daniel Kaffine, Kevin Roth, and Matthew Zaragoza-Watkins.
"The Effects of Regulation in the Presence of Multiple Unpriced Externalities: Evidence from the Transportation Sector."
American Economic Journal: Economic Policy,
Economics of Regulation
Automobiles; Other Transportation Equipment
Valuation of Environmental Effects
Climate; Natural Disasters; Global Warming
Transportation: Demand, Supply, and Congestion; Safety and Accidents; Transportation Noise
Transportation Economics: Government Pricing and Policy