Publication: Regulatory Instruments to Control Environmental Externalities from the Transport Sector
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Date
2009
ISSN
18253997
Published
2009
Author(s)
Timilsina, Govinda R.
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Abstract
This study reviews regulatory instruments designed to reduce environmental externalities from the transport sector. We find that the main regulatory instruments used in practice are fuel economy standards, vehicle emission standards, and fuel quality standards. While industrialized countries have introduced all three standards with strong enforcement mechanisms, most developing countries have yet to introduce fuel economy standards. The emission standards introduced by many developing countries to control local air pollutants follow either the EU or U.S. standards. Fuel quality standards, particularly for gasoline and diesel, have been introduced in many countries mandating 2 to 10 percents blending of biofuels, 10 to 50 times reduction of sulfur from 1996 levels and banning lead contents. Although inspection and maintenance (I/M) programs are in place in both industrialized and developing countries to enforce regulatory standards, these programs have faced several challenges in developing countries due to a lack of resources. The study also highlights several factors affecting the selection of regulatory instruments, such as countries' environmental priorities and institutional capacities.
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Publication A Review of Regulatory Instruments to Control Environmental Externalities from the Transport Sector(2009-03-01)This study reviews regulatory instruments designed to reduce environmental externalities from the transport sector. The study finds that the main regulatory instruments used in practice are fuel economy standards, vehicle emission standards, and fuel quality standards. Although industrialized countries have introduced all three standards with strong enforcement mechanisms, most developing countries have yet to introduce fuel economy standards. The emission standards introduced by many developing countries to control local air pollutants follow either the European Union or United States standards. Fuel quality standards, particularly for gasoline and diesel, have been introduced in many countries mandating 2 to 10 percent blending of biofuels, 10 to 50 times reduction of sulfur from 1996 levels, and banning lead contents. Although inspection and maintenance programs are in place in both industrialized and developing countries to enforce regulatory standards, these programs have faced several challenges in developing countries due to a lack of resources. The study also highlights several factors affecting the selection of regulatory instruments, such as countries' environmental priorities and institutional capacities.Publication Fiscal Policy Instruments for Reducing Congestion and Atmospheric Emissions in the Transport Sector : A Review(World Bank, Washington, DC, 2008-06)This paper reviews the literature on the fiscal policy instruments commonly used to reduce transport sector externalities. The findings show that congestion charges would reduce vehicle traffic by 9 to 12 percent and significantly improve environmental quality. The vehicle tax literature suggests that every 1 percent increase in vehicle taxes would reduce vehicle miles by 0.22 to 0.45 percent and CO2 emissions by 0.19 percent. The fuel tax is the most common fiscal policy instrument; however its primary objective is to raise government revenues rather than to reduce emissions and traffic congestion. Although subsidizing public transportation is a common practice, reducing emissions has not been the primary objective of such subsidies. Nevertheless, it is shown that transport sector emissions would be higher in the absence of both public transportation subsidies and fuel taxation. Subsidies are also the main policy tool for the promotion of clean fuels and vehicles. Although some studies are very critical of biofuel subsidies, the literature is mostly supportive of clean vehicle subsidies.Publication Urban Road Transportation Externalities : Costs and Choice of Policy Instruments(World Bank, 2011-07-02)Urban transportation externalities are a key development challenge. 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The main factors that influence the choice of policy instruments include economic efficiency, equity, country or city specific priority, and institutional capacity for implementation. Multiple policy options need to be used simultaneously to reduce effectively the different externalities arising from urban road transportation because most policy options are not mutually exclusive.Publication Are Foreign Investors Attracted to Weak Environmental Regulations? Evaluating the Evidence from China(2009)At the center of the pollution haven debate is the claim that foreign investors from industrial countries are attracted to weak environment regulations in developing countries. Some recent location choice studies have found evidence of this attraction, but only for inward FDI in industrial countries. The few studies of inward FDI in developing countries have been hampered by weak measures of environmental stringency and by insufficient data to estimate variation in firm response by pollution intensity. This paper tests for pollution haven behavior by estimating the determinants of location choice for equity joint ventures (EJVs) in China. Beginning with a theoretical framework of firm production and abatement decisions, we derive and estimate a location choice model using data on a sample of EJV projects, Chinese effective levies on water pollution, and Chinese industrial pollution intensity. Results show EJVs in highly-polluting industries funded through Hong Kong, Macao, and Taiwan are attracted by weak environmental standards. In contrast, EJVs funded from non-ethnically Chinese sources are not significantly attracted by weak standards, regardless of the pollution intensity of the industry. 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To assess the impact of Green Watch, the authors use panel data on pollution emissions from rated and unrated firms, before and after implementation of the program. Controlling for the characteristics of firms and locations, time trend, and initial level of environmental performance, the analysis finds that firms covered by Green Watch improve their environmental performance more than non-covered firms. Bad performers improve more than good performers, and moderately non-compliant firms improve more than firms that are significantly out of compliance. The reasons for these different responses seem to be that the strengths of incentives that the disclosure program provides to the polluters at different levels of compliance are different and the abatement costs of achieving desired levels of ratings are different for different firms.
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