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Automobile Externalities and Policies

40 Pages Posted: 4 Sep 2006 Last revised: 10 Nov 2008

Ian W. H. Parry

Resources for the Future

Margaret Walls

Resources for the Future - Quality of the Environment Division

Winston Harrington

Resources for the Future

Date Written: January 1, 2007

Abstract

This paper discusses the nature, and magnitude, of externalities associated with automobile use, including local and global pollution, oil dependence, traffic congestion and traffic accidents. It then discusses current federal policies affecting these externalities, including fuel taxes, fuel-economy and emissions standards, and alternative fuel policies, summarizing, insofar as possible, the welfare effects of those policies. Finally, we discuss emerging pricing policies, including congestion tolls, and insurance reform, and we summarize what appears to be the appropriate combination of policies to address automobile externalities.

Keywords: pollution, congestion, accidents, fuel tax, fuel-economy standard, congestion pricing

JEL Classification: Q54, R48, H23

Suggested Citation

Parry, Ian W. H. and Walls, Margaret and Harrington, Winston, Automobile Externalities and Policies (January 1, 2007). RFF Discussion Paper No. 06-26. Available at SSRN: https://ssrn.com/abstract=927794 or http://dx.doi.org/10.2139/ssrn.927794

Ian W. H. Parry (Contact Author)

Resources for the Future ( email )

1616 P Street, NW
Washington, DC 20036
United States
202-328-5151 (Phone)
202-939-3460 (Fax)

HOME PAGE: http://www.rff.org/~parry

Margaret Walls

Resources for the Future - Quality of the Environment Division ( email )

1616 P Street, NW
Washington, DC 20036
United States

Winston Harrington

Resources for the Future ( email )

1616 P Street, NW
Washington, DC 20036
United States
(202) 328-5112 (Phone)
(202) 939-3460 (Fax)

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