New Evidence on the Environmental Impacts of Driving Restrictions and Other Government Policies

Studies using time-series regression discontinuity (RD) designs find no effect of Mexico City\u27s driving restriction but an increase in car ownership after the restriction, while studies using difference-in-differences (DD) methods have shown the effectiveness of similar restrictions in other cities. Development literature has shown a wage shock for white-collar workers in Mexico during the same period, which may encourage initial car purchases among white-collars and confound the results from time-series RD. To control the wage shock, this study applies a DD method with unrestricted days and days after the restriction as a two-way control. It finds that Mexico City\u27s program led to a 3 to 5 percent significant reduction in Carbon Monoxide (CO) concentrations for all hours of the day and an 11 to 18 percent reduction during rush hours four years after the program. Echoing the possible effect of the white-collar wage shock, it also provides evidence of an increase in initial car purchases during the same period from household microdata. This new finding reconciles conflicting signs in the driving restrictions literature. A one-weekday-per-week driving restriction used to curb severe air pollution was implemented in Beijing right after the Olympic Games in October 2008. Macroeconomics studies have shown that previous Olympics have led to a boom in the local economy. To prepare for the Olympics, the Beijing government also introduced other programs such as closure of high-polluting plants, enforcement of new emission standards and extension of subway routes. Given that the Olympic shock may have added more pollution while other programs may have reduced pollution, it is essential to separate these effects when evaluating the driving restriction\u27s effects. Previous study failed to account for these other factors have reported that driving restrictions led to a 21% decrease in Beijing\u27s air pollution. Using weekends as a control, this study finds a 3-5 percent significant reduction in air pollution. The magnitude of the effect is similar as the magnitude found in Mexico City\u27s driving restriction. In May 2013, President Xi Jinping launched an ambitious anti-corruption drive (ACD) in China that prohibits various forms of corruption among party officials. Given most forms of corruption such as bureaucratic banquets/visits involve use of motor vehicles, the ACD could indirectly reduce the use of motor vehicles and hence pollutants mainly emitted from them. This paper identifies the effect of the ACD through the exogenous variations in air quality generated by the ACD in metropolitan Beijing and suburb Beijing before and after the program. It finds a 6 percent significant reduction in PM2.5 concentrations due to the ACD, the magnitude of which is similar to imposing a driving ban in Beijing