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Does expanding regional train service reduce air pollution?

Rafael Lalive, Simon Luechinger () and Armin Schmutzler ()

Journal of Environmental Economics and Management, 2018, vol. 92, issue C, 744-764

Abstract: We assess how regional rail service affects air pollution in Germany, where rail service is procured in auctions or negotiations. We argue that the procurement mode is plausibly exogenous, and show that auctions deliver stronger rail service growth than negotiations. Instrumenting rail service growth with procurement mode, we find that increasing rail service by 10% reduces carbon monoxide and nitrogen oxide pollution by around 1% and 2%, respectively. Sulfur dioxide and ozone, pollutants with no clear link to rail, are not affected. Expanding rail service reduces car and motorcycle use, especially on leisure and shopping trips. The effects of railway services on car and motorcycle use and on air pollution build up over time. Lives saved by reducing pollution via rail service growth are worth substantially more than the required subsidies.

Keywords: Railways; Pollution; Subsidies; Transportation; Environmental policy (search for similar items in EconPapers)
JEL-codes: Q53 R41 R48 (search for similar items in EconPapers)
Date: 2018
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Journal of Environmental Economics and Management is currently edited by M.A. Cole, A. Lange, D.J. Phaneuf, D. Popp, M.J. Roberts, M.D. Smith, C. Timmins, Q. Weninger and A.J. Yates

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