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Technological Modifications in the Nitrogen Oxides Tradable Permit Program

Joshua Linn

Year: 2008
Volume: Volume 29
Number: Number 3
DOI: 10.5547/ISSN0195-6574-EJ-Vol29-No3-8
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Abstract:
Tradable permit programs allow firms greater flexibility in reducing emissions than command-and-control regulations and encourage firms to use low cost abatement options, including small-scale modifications to capital equipment. This paper shows that firms have extensively modified capital equipment in the Nitrogen Oxides Budget Trading Program, which covers power plants in the eastern United States. The empirical strategy uses geographic and temporal features of the program to estimate counterfactual emissions, finding that modifications have reduced emission rates by approximately 10-15 percent. The modifications would not have occurred under command-and-control regulation and have reduced regulatory costs.



The Rebound Effect for Passenger Vehicles

Joshua Linn

Year: 2016
Volume: Volume 37
Number: Number 2
DOI: 10.5547/01956574.37.2.jlin
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Abstract:
The United States and many other countries are dramatically tightening fuel economy standards for passenger vehicles. Higher fuel economy reduces per-mile driving costs and may increase miles traveled, known as the rebound effect. The magnitude of the elasticity of miles traveled to fuel economy is an important parameter in welfare analysis of fuel economy standards, but all previous estimates from micro data impose at least one of three behavioral assumptions: (a) fuel economy is uncorrelated with vehicle and household attributes; (b) for multi-vehicle households, each vehicle can be treated as an independent observation in statistical analysis; and (c) the effect of gasoline prices on vehicle miles traveled is inversely proportional to the effect of fuel economy. Two approaches to relaxing these assumptions yield a large estimate of the rebound effect; a one percent fuel economy increase raises driving 0.2 or 0.4 percent, depending on the approach, but the estimates are not statistically significantly different from one another.



Explaining the Evolution of Passenger Vehicle Miles Traveled in the United States

Benjamin Leard, Joshua Linn, and Clayton Munnings

Year: 2019
Volume: Volume 40
Number: Number 1
DOI: 10.5547/01956574.40.1.blea
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Abstract:
After growing steadily for several decades, passenger vehicle miles traveled (VMT) in the United States unexpectedly leveled off in the 2000s. The growth rate of VMT has since rebounded, and determining the factors that explain these developments has implications for future U.S. oil consumption and vehicle pollution. We show that changes in the demographics and economic characteristics of households in the United States, rather than in driving habits, explain most of the recent dynamics. This suggests that over the next decade, VMT in the United States will continue to grow roughly at historical rates, causing substantially higher oil consumption and pollution than if persistent changes in driving habits explained the recent changes in VMT. The projected VMT growth will raise the cost of meeting energy security, climate, and local air quality objectives.



The Impacts of Lower Natural Gas Prices on Jobs in the U.S. Manufacturing Sector

Wayne Gray, Joshua Linn, and Richard Morgenstern

Year: 2019
Volume: Volume 40
Number: Number 5
DOI: 10.5547/01956574.40.5.wgra
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Abstract:
The recovery of the U.S. manufacturing sector following the 2008-2009 economic recession coincided with a sharp drop in natural gas prices. To determine whether a causal connection in fact exists, we use confidential plant-level data for 1972-2012 to estimate the employment effects of changes in natural gas and other energy prices. Previous analyses have used aggregated data and failed to control for multiple drivers of employment dynamics, such as other input costs. We show that controlling for these factors substantially diminishes the effects of natural gas and electricity prices on manufacturing employment. Accounting for the direct effects of natural gas prices as well as the indirect effects via electricity prices, we estimate that the decline in natural gas prices between 2007 and 2012 raised overall manufacturing employment by 0.6 percent, and for gas-intensive industries, by 1.8 percent.





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