November 15, 2010

Carbon Prices and Automobile Greenhouse Gas Emissions: The Extensive and Intensive Margins

by Christopher R. Knittel and Ryan Sandler

- This paper analyzes how pricing carbon through either a cap and trade system or carbon tax might affect greenhouse gas emissions from the transportation sector by estimating how changes in gasoline prices alter consumer behavior. We analyze their effect on both the intensive (e.g., vehicle miles travelled) and extensive (e.g., vehicle scrapping) margins. We find large effects on both margins.

Knittel, C.R. and R. Sandler (2010). "Carbon Prices and Automobile Greenhouse Gas Emissions: The Extensive and Intensive Margins." NBER Working Paper No. 16482, Oct 2010.