Policy Instrument Choice with Co-Benefits: The Case of Decarbonizing Transport

Florian Landis and Sebastian Rausch

No 333103, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: This paper examines alternative regulatory strategies for decarbonizing private transportation in the presence of congestion co-benefits. To capture the behavioral responses of heterogeneous households to regulation and consistently value the monetary and time costs of commuting, we integrate (1) spatial household-level data on the location of residence and work, (2) road network and traffic data from Google, and (3) household survey data on expenditure and income into a dynamic general equilibrium model which features pre-existing fuel taxes and technology choice between internal combustion engine and electric vehicles. Ignoring co-benefits, an emissions intensity standard outperforms carbon pricing because it is a smaller implicit tax on factors of production. With co-benefits, carbon pricing yields aggregate efficiency gains. Moreover, only high-income households with short- to medium-distance commutes or low congestion exposure prefer a standard over carbon pricing. Under both policies, low-income households with long commutes incur the largest costs. Our analysis suggests that carbon pricing, along with targeted measures to alleviate the burden for low-income households, can be an efficient and equitable instrument for decarbonizing private transport.

Keywords: Agricultural; and; Food; Policy (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/333103/files/9468.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:333103

Access Statistics for this paper

More papers in Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().