Keep Your Clunker in the Suburb: Low Emission Zones and Adoption of Green Vehicles

Hendrik Wolff ()
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Hendrik Wolff: Simon Fraser University

No 8180, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Spatial distribution and leakage effects are of great policy concern and increasingly discussed in the economics literature. Here we study Europe's most aggressive recent air pollution regulation: Low Emission Zones are areas in which vehicular access is allowed only to vehicles that emit low levels of air pollutants. Using new administrative datasets from Germany, we assess the distribution of air pollution and the spatial substitution effects in green versus dirty vehicles. We find that LEZs decrease air pollution by around nine percent in urban traffic centers while pollution is unchanged in non-traffic areas. These results are driven by our finding that vehicle owners have an incentive to adopt cleaner technologies the closer they live to an LEZ. We reject the widespread concern that dirty vehicles contribute to higher pollution levels by increasingly driving longer routes outside of the LEZ. Back of the envelope calculations suggest that the health benefits of roughly two billion dollars have come at a cost of just over 1 billion dollars for upgrading the fleet of vehicles. Moreover, we find that non-attainment cities that decided not to include an LEZ but engaged in other methods (building ring roads, enhancing public transportation), experience no decrease in pollution.

Keywords: air pollution; low emission zones; PM10 (search for similar items in EconPapers)
JEL-codes: Q58 R48 (search for similar items in EconPapers)
Pages: 65 pages
Date: 2014-05
New Economics Papers: this item is included in nep-ene, nep-env, nep-eur, nep-res, nep-tre and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (112)

Published - published in: Economic Journal, 2014, 124(578), F481–F512

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