Automobiles and environmental policy: Three essays

Although several different policies have emerged over the years for controlling the environmental impacts of the automobile, a majority of them can be characterized as either technology-based regulation or pricing incentives. These two approaches to reducing automotive emissions are considerably different, implying that their resulting impacts are also very different. This dissertation is comprised of three essays which primarily explore the comparative effects of fuel economy standards and taxation, providing useful insights into the relative attractiveness of technology-based regulatory tools versus pricing incentives for environmental improvement.;The first essay (Chapter 2) presents two theoretical models and a small CGE model. The theoretical results show that, in the short run, a binding fuel economy standard creates an implicit subsidy on some automobiles, encouraging their use and potentially increasing aggregate emissions. By contrast, the optimal tax rates are shown to be strictly positive for all automobiles. Similarly, the numerical results reveal that, by altering the composition of automobile use and not so much its level, fuel economy standards substantially improve average fuel efficiency while having an ambiguous impact on emissions and welfare. Taxes, on the other hand, have the opposite effect--they significantly reduce emissions and improve welfare without having much impact on average fuel efficiency.;The second essay (Chapter 3) expands the CGE model of Chapter 2 in order to more closely examine the effects that fuel economy standards have on average fuel efficiency through shifts in new automobile sales. The results reveal that fuel economy standards lead to changes in the composition of new automobile fleets that greatly diminish their impact on average fuel efficiency; the results are consistent with data for the U.S. in recent years.;The third essay (Chapter 4) extends the analysis of the first two essays by exploring the welfare effects of four automobile-related environmental policies, including both fuel taxation and fuel economy standards, in a spatial model of urban air pollution. The results show that the selected policies vary widely in the number and complexity of their effects, suggesting that those policies which have simpler and more tractable impacts are perhaps preferred.