Exercising a vehicle miles traveled tax to control mobile-source pollution: A study of reducing PM2.25 in Cache County, Utah

his study analyzes the effects of a vehicle miles traveled (VMT) tax on controlling mobile-source emissions in non-attainment areas. We show that a Pigovian VMT tax deters driving by increasing the marginal cost of travel proportional to a driver's relative contribution to the aggregate welfare loss associated with his emissions. We empirically estimated the response of driver behavior to a VMT tax in Cache County, Utah. Using results from vehicle emissions tests performed by the Houston Advanced Research Center, we then estimate the reduction in emissions that would occur with two different sets of VMT tax rates. Our principal findings show that a VMT tax rate of...