The economics of stationary and mobile source air pollution control in urbanized areas

Several air pollutants are emitted by both stationary and mobile sources, causing significant air quality problems in urbanized areas. In the United States, air quality control agencies exercise power over stationary sources and over emissions per mile driven from mobile sources, but typically take the total number of vehicle miles of travel (VMT) as given. Ignoring the growth in VMT may have implications for industrial development in affected regions, as stationary sources bear an increasing share of emissions control costs. The increased use of VMT controls need to be evaluated as emissions control policies.^ The air quality economics literature typically considers stationary and mobile source emissions controls separately. In this dissertation, a mathematical model is developed to examine the cost effective allocation of emissions control between stationary and mobile sources. A simplified version of the model is applied to the control of volatile organic compounds (hydrocarbons) in Connecticut. The state is in violation of the Clean Air Act\u27s standard for ground level ozone, and is required to reduce volatile organic compound emissions by fifteen percent. The model allows for emissions reductions to come from stationary sources, emissions per vehicle mile from mobile sources, and from the reduction of VMT.^ Data from Connecticut is used to estimate the demand for VMT as a function of changes in gasoline price. This gasoline price can be influenced in the model by the use of cleaner and more expensive reformulated fuels or by an increase in the gasoline tax. Analysis with the model show that an optimally determined gasoline tax (about 1.2 cents per gallon) will only slightly reduce the total social costs of Connecticut\u27s emissions control program, and will not cause any reallocation of emissions control among stationary and mobile sources. Changes in the cost parameters and elasticity of VMT did not substantially alter these findings. Additionally, the use of methanol blended gasoline in Connecticut\u27s emissions control program is evaluated. This type of emissions control strategy has the benefit of reducing emissions per mile driven, while also reducing total VMT through an increase in gasoline price.