The Effects of Urban Public Transit Investment on Traffic Congestion and Air Quality

Traffic congestion is ubiquitous across urban roadways, and the adverse health effects accompanying deteriorating air quality are an ongoing concern. Beyond these local effects, transportation is also a major contributor of greenhouse gas emissions and is thus a significant element of the climate change debate. A contentious issue currently confronting transportation analysts and policy-makers is what the effects of public transit investment on traffic congestion and on air quality are and therefore what the appropriate level of public transit investment should be. While public transit receives plenty of political support for its “green” reputation and its contribution to sustainability, there have been relatively few studies examining the ex post–effects of public transit investment on traffic congestion or air quality. In this chapter, we review our theoretical and empirical research on the effects of public transit investment on congestion, the demand for automobile travel, and air quality

The Design of Renewable Fuel Policies and Cost Containment Mechanisms

Renewable fuel mandates are popular policy mechanisms to reduce greenhouse gas emissions from transportation fuels. We study the effects and effciency of two policies, a renewable share mandate and a carbon intensity standard, with and without a cost containment mechanism. Using both a theory model of a regulated fuel industry and a numerical model of the U.S. fuel market, we show that an optimally set mandate leads to only modest welfare gains over business as usual. However, the effciency of both policies substantially increases when combined optimally with a cost containment mechanism

Policy Shocks and Market-Based Regulations: Evidence from the Renewable Fuel Standard

The Renewable Fuel Standard mandates large increases in U.S. biofuel consumption and is implemented using tradable compliance credits known as RINs. In early 2013, RIN prices soared, causing the regulator to propose reducing future mandates. We estimate empirically the effect of three ‘policy shocks’ that reduced the expected mandates in 2013. We find that the largest of these shocks decreased the value of the fuel industry’s 2013 compliance obligation by $7 billion. We then study the effects of the shocks on commodity markets and the market value of publicly traded biofuel firms. Results show that the burden of the mandate reductions fell primarily on advanced biofuel firms and commodity markets of the marginal compliance biofuel. We argue that the policy shocks reduced the incentive to invest in the technologies required to meet the future objectives of the RFS, and discuss alternative policy designs to address the problems that arose in 2013

Policy Shocks and Market-Based Regulations: Evidence from the Renewable Fuel Standard

DTRT13-G-UTC29Citation: Lade, Gabriel E., C.-Y. Cynthia Lin Lawell, and Aaron Smith. (Draft 2017) Policy Shocks and Market-Based Regulations: Evidence from the Renewable Fuel Standard.The Renewable Fuel Standard mandates large increases in U.S. biofuel consumption and is implemented using tradable compliance credits known as RINs. In early 2013, RIN prices soared, causing the regulator to propose reducing future mandates. We estimate empirically the effect of three \u2018policy shocks\u2019 that reduced the expected mandates in 2013. We find that the largest of these shocks decreased the value of the fuel industry\u2019s 2013 compliance obligation by $7 billion. We then study the effects of the shocks on commodity markets and the market value of publicly traded biofuel firms. Results show that the burden of the mandate reductions fell primarily on advanced biofuel firms and commodity markets of the marginal compliance biofuel. We argue that the policy shocks reduced the incentive to invest in the technologies required to meet the future objectives of the RFS, and discuss alternative policy designs to address the problems that arose in 2013

What Factors Affect the Decision to Invest in a Fuel Ethanol Plant?: A Structural Model of the Ethanol Investment Timing Game

DTRT13-G-UTC29Citation: Yi, Fujin, and C.-Y. Cynthia Lin Lawell. (Draft 2017). What Factors Affect the Decision to Invest in a Fuel Ethanol Plant?: A Structural Model of the Ethanol Investment Timing Game.This paper analyzes how economic factors, strategic factors, and government policies affect the decision to invest in building new ethanol plants in Europe

Environmental Policies in the Transportation Sector: Taxes, Subsidies, Mandates, Restrictions, and Investment

The transportation sector is associated with many negative externalities, including air pollution, global climate change, and traffic congestion. In this paper we discuss several possible policies for addressing the emissions and other environmental externalities from the transportation sector, including taxes, subsidies, mandates, restrictions, and investment. Most economists generally recommend that policy-makers use incentive- (or market-) based instruments as opposed to command and control policies whenever possible. However, various economic and political constraints can preclude policy instruments that would in theory achieve a first-best outcome from being employed, and policy-makers have often implemented alternative policies such as subsidies, mandates, restrictions, and/or investment instead. Our discussion and analysis of these policies draws upon and synthesizes research using theoretical models, behavioral and experimental economics, empirical analyses, and structural econometric modeling

Dynamic Structural Econometric Modeling of the Ethanol Industry

Cite as Lin Lawell, CY.C. (2017). Dynamic Structural Econometric Modeling of the Ethanol Industry. In: Pinto, A., Zilberman, D. (eds) Modeling, Dynamics, Optimization and Bioeconomics II. DGS 2014. Springer Proceedings in Mathematics & Statistics, vol 195. Springer, Cham. https://doi.org/10.1007/978-3-319-55236-1_14This chapter reviews some of the papers my co-authors and I have written developing and estimating dynamic structural econometric models of dynamic games in the ethanol industry. These structural econometric models model the dynamic and strategic decisions made by ethanol firms and enable us to analyze the effects of government policy

The Design of Renewable Fuel Mandates and Cost Containment Mechanisms

Citation: Lade, G.E., Lin Lawell, CY.C. The Design of Renewable Fuel Mandates and Cost Containment Mechanisms. Environ Resource Econ 79, 213\u2013247 (2021). https://doi.org/10.1007/s10640-021-00558-wPolicies to reduce greenhouse gas emissions from transportation fuels often take the form of renewable fuel mandates rather than taxes or cap-and-trade programs. Delays in the development and deployment of new technologies when binding mandates exist for their use may lead to situations with high compliance costs

The Design and Economics of Low Carbon Fuel Standards

Citation: Lade, Gabriel E., and C.-Y. Cynthia Lin Lawell. (2015). The design and economics of low carbon fuel standards. Research in Transportation Economics, 52, 91-99. https://doi.org/10.1016/j.retrec.2015.10.009Low carbon fuel standards (LCFS) are increasingly common policy tools used to decrease emissions and increase the penetration of renewable energy technologies in the transportation sector. In this paper, we discuss important design elements of the policy, and provide a background on prominent policies that are currently enacted or proposed