| Abstract: | One of the central elements in the 1990 Clean Air Act Amendments is the regulation of emissions from motor vehicles. This legislation will have a dramatic impact on the type of cars people drive over the coming decades. Given the high cost of achieving further reductions from automobiles, there has been increasing interest in exploring new technologies and alternative fuels that improve environmental quality. The purpose of this study is to provide an integrated framework for assessing the cost effectiveness of control options that involve a combination of vehicle changes and fuel changes. This study demonstrates the importance of doing an integrated analysis in selecting an appropriate combination of technologies and fuels; it also highlights the need to consider decentralized regulatory approaches, such as effluent taxes and marketable permits, when the data are characterized by large uncertainties. The analysis suggests that a modest improvement in vehicle control technology is probably a cost effective strategy for reducing ozone; however, using a severely reformulated gasoline or an advanced technology, such as the electric vehicle, is unlikely to be cost effective compared with other available options for improving air quality. The cost savings from introducing a market-based approach in place of a vehicle mandate in California and the Northeast are estimated to range from $7 to $29 billion. |
