Abstract:Economists have long urged governments to use Pigouvian taxes to reduce emissions efficiently. Rarely has it happened, mostly because technology hasn’t existed until now to precisely measure in-use emission by location and time. In recent years, increasingly sophisticated on-board diagnostic (OBD) devices have been required for cars and trucks to monitor engine operation and measure in-use fuel consumption and emissions of vehicles. This paper proposes the use of Pigouvian pricing to reduce emissions from on-road heavy-duty vehicles (HDVs)—by utilizing emission data from OBD devices and location data from global position system (GPS) devices. Thus, emissions can be measured over time and space. The authors address the feasibility of using OBD and GPS devices in this way, taking into account the monitoring system consisting of OBD and GPS, designated area, pricing scheme, and the relationship with other related policies. They conclude that emission data can be collected reliably using OBD technology, and that location- and time-specific pricing policies are technically feasible.

Note:

Presented at Transportation Research Board 96th Annual Meeting, Washington, DC, January 8-12, 2017