Automobile Externalities and Policies

Ian Parry, Margaret Walls and Winston Harrington

Journal of Economic Literature, 2007, vol. 45, issue 2, 373-399

Abstract: This paper discusses the nature, and magnitude, of externalities associated with automobile use, including local and global pollution, oil dependence, traffic congestion and traffic accidents. It then discusses current federal policies affecting these externalities, including fuel taxes, fuel economy and emissions standards, and alternative fuel policies, summarizing, insofar as possible, the welfare effects of those policies. Finally, we discuss emerging pricing policies, including congestion tolls, and insurance reform, and summarize the appropriate combination of policies to address automobile externalities.

Date: 2007
Note: DOI: 10.1257/jel.45.2.373
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