Greener Fleet, Cleaner Air: How Low Emission Zones Reduce Pollution

Eren Aydin, Markus Gehrsitz () and Christian Traxler
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Eren Aydin: Hertie School of Governance
Markus Gehrsitz: University of Strathclyde

No 17144, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Using a stacked differences-in-differences approach, we study the effects of Low Emission Zones (LEZs) in Germany. The implementation of stage 1 and 2 LEZs, which banned the most pollution-intensive vehicles from city centers, significantly reduced PM10 concentrations. The most restrictive third stage had no detectable, additional effect. Analyzing the mechanisms behind these improvements, we find weak evidence of a 2% traffic decline inside LEZs. Exploiting novel data, our main results document small but precisely estimated effects on the local fleet composition: LEZs induced the replacement of 50,000 older, emission-intensive diesel vehicles with newer, less polluting gasoline cars. Our estimates suggest that LEZs had lower social costs than previously estimated.

Keywords: low emission zones; vehicle fleet composition; emission standards; social costs; diesel cars (search for similar items in EconPapers)
JEL-codes: Q52 Q53 Q58 R40 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2024-07
New Economics Papers: this item is included in nep-ene, nep-env and nep-tre
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