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Three Essays in Energy and Environmental Economics Open Access


Other title
Environmental effects of Cash for Clunkers program
Effects of Gasoline Content Regulation on vehicle pollution
Evaluating fuel efficiency rebound effect
Type of item
Degree grantor
University of Alberta
Author or creator
Li, Hanxiao
Supervisor and department
Chakravorty, Ujjayant (Department of Economics)
Marchand, Joseph (Department of Economics)
Examining committee member and department
Eckert, Heather (Department of Economics)
Brown, David (Department of Economics)
Liu, Runjuan (School of Business)
Gulati, Sumeet (Environmental and Resource Economics)
Department of Economics

Date accepted
Graduation date
Doctor of Philosophy
Degree level
Motor vehicle emissions constitute a major source of local air pollution in the United States. The U.S. government stipulated motor fuel content regulations and required that cleaner fuels be adopted, instead of conventional gasoline, in certain pollution non-attainment areas. To determine the environmental effects of these regulations, the emissions levels that would have been reduced in the regulated areas in the absence of the regulations need to be known. However, this counter-factual does not exist. The difference-in-difference strategy employed in the current study takes the reductions in the emissions of control counties as a surrogate for the counter-factual of the regulated areas. I find that the introduction of gasoline content regulations results in a dramatic reduction in the pollution from on-road vehicles but not from off-road engines and vehicles, during the period 1990 to 2002. Therefore, the less affected pollution from the off-road sources could nullify the environmental benefits by adopting clean fuels. This may be an additional explanation for why local air quality did not improve though cleaner fuels were prescribed to certain polluted areas. An accelerated vehicle retirement program was also adopted by the U.S. government to address vehicle air pollution. The U.S. “Cash for Clunkers” (CARS) program offered incentive to participants who retired their current vehicles and purchased a new vehicle, provided that certain requirements on fuel economy improvements and vehicle categories were satisfied. I evaluate the pollution-reduction effects of this program. Based on the rich set of household and vehicle characteristics contained in the 2009 National Household Travel Survey (NHTS) data, an instrumental variable regression is used to predict the travel demand for the CARS retried and replacement vehicles and then their associated pollution. This study finds that the CARS program potentially does not result in a reduction of CO2 emissions and an environmental gain, even with taking into account its effects on the emissions of criteria pollutants. The U.S. Corporate Average Fuel Economy (CAFE) standards have imposed increasingly stringent requirements on vehicle fuel economy. The improvement of fuel efficiency is motivated by the desire to reduce fuel consumption and vehicle carbon emissions. However, the improved fuel efficiency leads to a reduced per-mile cost of driving and thus additional travel demand, which is a direct rebound or “take back” effect, because it may offset the potential fuel savings that otherwise would be obtained. This study empirically identifies the rebound effect by estimating a joint model, which determinines vehicle miles and fuel efficiency simultaneously. The current study finds no evidence of the rebound effect and concludes that the potential negative effect resulting from the fuel efficiency improvement should not be a concern.
Permission is hereby granted to the University of Alberta Libraries to reproduce single copies of this thesis and to lend or sell such copies for private, scholarly or scientific research purposes only. The author reserves all other publication and other rights in association with the copyright in the thesis and, except as herein before provided, neither the thesis nor any substantial portion thereof may be printed or otherwise reproduced in any material form whatsoever without the author's prior written permission.
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