USING ECONOMIC INCENTIVES TO REDUCE AUTO POLLUTION

When the serious health threat posed by breathing ozone was recognized, Congress took aggressive action by writing emissions standards for new cars into the 1970 Clean Air Act. Because automobile emissions are the major source of the chemicals that react to form ozone, it was hoped that this would be enough to lower ozone concentrations to safe levels throughout the country. By late 1980s there were still nearly 100 urban areas that did not meet the desired ozone limits. Even tighter regulations were written into the 1990 Clean Air Act Amendments. As a result, the EPA and the state air-quality agencies have begun implementing a series of new regulations, many of which are very costly and cumbersome. This article looks at the Clean Air Act requirements to determine how to identify some incentive programs that would have cost-effective effects on ozone levels.