This paper demonstrates the historic effectiveness of new vehicle emissions standards at reducing local air pollution from personal automobiles, but it also argues that the efficiency of such policies is greatly reduced by the failure to use complimentary policies that accelerate fleet turnover. The project combines new vehicle certification tests and in-use compliance testing from millions of automobiles to construct a consistent measure of air pollution from vehicles over six decades in the United States. We use these data to show a 99% reduction in the emissions rates of vehicles, using quasi-exogenous policy variation to argue for a causal link to policy. We then develop an analytical model of the vehicle lifecycle in order to demonstrate that the value of pairing improvements in new vehicle standards with policies that accelerate the retirement of older, dirtier vehicles, which we quantify via simulation.
James M. Sallee is an Assistant Professor in the Department of Agricultural and Resource Economics at UC Berkeley and a Faculty Research Fellow of the National Bureau of Economic Research. He is a public economist who studies topics related to energy, the environment and taxation. Much of his work evaluates policies aimed at mitigating greenhouse gas emissions related to the use of automobiles.