Economic Analysis of a Japanese Air Pollution Regulation: An Optimal Retirement Problem under Vehicle Type Regulation in the NOx-Particulate Matter Law

33 Pages Posted: 20 Aug 2008 Last revised: 23 Oct 2013

See all articles by Kazuyuki Iwata

Kazuyuki Iwata

Takasaki City University of Economics - Regional Policy

Toshi H. Arimura

Waseda University - School of Political Science and Economics

Date Written: June 15, 2008

Abstract

This paper empirically examines the vehicle type regulation that was introduced under the Automobile Nitrogen Oxides-Particulate Matter Law to mitigate air pollution problems in Japanese metropolitan areas. The vehicle type regulation effectively sets various timings of vehicle retirement by the first registration year and by type. However, there was no consideration of cost or efficiency in choosing the timing of retirement. We set and solve an optimal problem to maximize the social net benefit under the current framework of the vehicle type regulation. The analysis finds that the net benefit can increase by about 104 percent if the optimal retirement timing is chosen. Further, we confirm that even a simple alteration of retirement timing can increase the social net benefit by 13 percent. Thus, we confirm the importance of an ex-ante quantitative policy evaluation, a regulatory impact analysis, from the viewpoint of efficiency.

Keywords: air pollution, regulatory impact analysis, NOx-PM law, cost-benefit analysis, optimal retirement model

JEL Classification: Q52, Q53, Q58

Suggested Citation

Iwata, Kazuyuki and Arimura, Toshihide H., Economic Analysis of a Japanese Air Pollution Regulation: An Optimal Retirement Problem under Vehicle Type Regulation in the NOx-Particulate Matter Law (June 15, 2008). RFF Discussion Paper 08-15. Available at SSRN: https://ssrn.com/abstract=1238664 or http://dx.doi.org/10.2139/ssrn.1238664

Kazuyuki Iwata

Takasaki City University of Economics - Regional Policy ( email )

United States

Toshihide H. Arimura (Contact Author)

Waseda University - School of Political Science and Economics ( email )

1-6-1 Nishi-Waseda
Shinjuku-ku, Tokyo 169-8050, Tokyo 169-8050
Japan

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
59
Abstract Views
745
rank
376,818
PlumX Metrics