Automobile Externalities and Policies
40 Pages Posted: 4 Sep 2006 Last revised: 10 Nov 2008
Date Written: January 1, 2007
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: Suggested Citation