Getting Cars Off the Road: The Cost-Effectiveness of an Episodic Pollution Control Program

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 emissions reductions of a program 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 nitrogen oxides (<InlineEquation ID="IEq1"> <EquationSource Format="TEX">$$\text{ NO }_{\mathrm{x}}$$</EquationSource> <EquationSource Format="MATHML"> <math xmlns:xlink="http://www.w3.org/1999/xlink"> <mrow> <mspace width="0.333333em"/> <mtext>NO</mtext> <mspace width="0.333333em"/> <msub> <mrow/> <mrow> <mi mathvariant="normal">x</mi> </mrow> </msub> </mrow> </math> </EquationSource> </InlineEquation>) by 42 tons per Code Red day at a permit price of $75. Allowing for non-compliance by 15 % of respondents reduces the effectiveness of the scheme to 33 tons of <InlineEquation ID="IEq2"> <EquationSource Format="TEX">$$\text{ NO }_{\mathrm{x}}$$</EquationSource> <EquationSource Format="MATHML"> <math xmlns:xlink="http://www.w3.org/1999/xlink"> <mrow> <mspace width="0.333333em"/> <mtext>NO</mtext> <mspace width="0.333333em"/> <msub> <mrow/> <mrow> <mi mathvariant="normal">x</mi> </mrow> </msub> </mrow> </math> </EquationSource> </InlineEquation> per day. The cost per ozone season of achieving these reductions is approximately $9 million (2008 USD). Although year-round measures, such as the Tier II emissions standards, might be preferred on benefit-cost grounds, an episodic permit system might be considered as an interim measure before the Tier II emissions standards are fully reflected in the vehicle fleet. Copyright Springer Science+Business Media Dordrecht 2014