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Estimating the effectiveness of a vehicle miles travelled tax in reducing particulate matter emissions

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  • Jordan Carroll-Larson
  • Arthur Caplan

Abstract

This study estimates the effectiveness of a vehicle miles travelled (VMT) tax in controlling mobile-source emissions of particulate matter (PM2.5) in a non-attainment area located in northern Utah. Using a recently updated household-level dataset, the study finds no evidence of an endogenous relationship between choice of vehicle type and VMT. VMT elasticities are also estimated with respect to cost per mile that are in some cases larger in magnitude than those reported in previous studies. Based on vehicle emissions tests performed by the Houston Advanced Research Center, the study estimates the reduction in particulate emissions that would occur with two different sets of VMT tax rates. Principal findings are that a VMT tax rate of $0.003 per passenger car mile and $0.01 per light-duty truck mile (resulting in a mean annual tax burden of $128 per household in the first year) would reduce annual particulate emissions by between 7% and 11%, depending upon the degree of heterogeneity in household driving behaviour. Assuming constant elasticity, this means that at tax rates of $0.006 and $0.02 per mile for passenger cars and light-duty trucks, respectively (resulting in double the mean annual tax burden), annual particulate emissions would be reduced by between 12% and 23%. Both the advantages and limitations of the VMT tax are discussed.

Suggested Citation

  • Jordan Carroll-Larson & Arthur Caplan, 2009. "Estimating the effectiveness of a vehicle miles travelled tax in reducing particulate matter emissions," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 52(3), pages 315-344.
  • Handle: RePEc:taf:jenpmg:v:52:y:2009:i:3:p:315-344
    DOI: 10.1080/09640560802703223
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    References listed on IDEAS

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    1. Maureen Sevigny, 1998. "Taxing Automobile Emissions for Pollution Control," Books, Edward Elgar Publishing, number 1447.
    2. West, Sarah E., 2004. "Distributional effects of alternative vehicle pollution control policies," Journal of Public Economics, Elsevier, vol. 88(3-4), pages 735-757, March.
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    1. Timothy Welch & Sabyasachee Mishra, 2014. "Envisioning an emission diet: application of travel demand mechanisms to facilitate policy decision making," Transportation, Springer, vol. 41(3), pages 611-631, May.
    2. Yasser Ammar AL-Rawi & Mohammed Harith Imlus & Yusri Yusup & Sofri Bin Yahya, 2018. "The Optimal Progressive Tax Policy to Reduced Vehicles Externalities," Journal of Asian Scientific Research, Asian Economic and Social Society, vol. 8(8), pages 265-276, August.
    3. Legge, Thomas & Scott, Susan, 2009. "Policy Options to Reduce Ireland's Greenhouse Gas Emissions," Research Series, Economic and Social Research Institute (ESRI), number RS9.
    4. Yasser A. Al-Rawi & Mohammed Harith Imlus & Yusri Yusup & Sofri Bin Yahya, 2021. "Factors affecting vehicle exhaust emissions, driver motivations as a mediator," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 23(2), pages 361-407, April.

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