Wrap Up

Tentative Plan for Final Exam

10-20 pts. 5-10 multiple choice (for VMT lectures) ~20 pts. 10 definitions of acronyms, common

phrases) (eg, CAFE), with short explanations (1-2 sentences)

~30 pts. 4-6 short answers (~1 paragraph) ~30 pts. ~2 short essays (out of 3-4 choices) (<1

page each)

Final Exam Key concepts: different policy

approaches; mandates vs regulations; role of technology and behavior, trends, externalities, three-legged stool, future of oil, elasticity, LCA, pricing, “if you can’t measure it you can’t manage it,” “no silver bullets” (need portfolio)

PROBLEMS Air Quality

Local air quality Health impacts of pollution

Energy Oil prices, costs of travel and goods transport Oil imports, security, geopolitics

Climate Change Environmental, economic impacts

Currently active policy area (e.g. California’s AB 32, low carbon fuel standard)

Key overarching issues

• Are we running out of oil?• Why are we interested in alternative fuels?• What should we do about climate change?• Is air pollution a severe problem?• Is technology the solution to energy, air

pollution, and climate problems?• How do we use policy to manage car use,

and why?

Systems challenges

How to transform vehicles, fuels, and mobility?

Case study: Why are fuel cell vehicles arguably the most difficult technology to introduce? Why did EVs supplant FCVs as the “fuel du jour”?

Externalities• What are they?

– Impacts (costs or benefits) not directly involved in an economic decision• Why do we care?

– Sometimes the free market system does not fully account for all economic costs and benefits to society

– This can result in socially sub-optimal results• Transportation examples: air pollution, petroleum dependence, congestion,

climate change

FirmConsumer

Goods

Money

Consumption

External impacts on others not involved in economic decision

Production

Primary Policy Approaches to Deal with Externalities

– Regulatory instruments – Government could ban (or restrict) air pollution, enforce with inspectors and lawyers

– Pure market instrument (“Pigouvian” tax) – Government could tax polluters in accordance with the social costs they generate

– Marketable permits – Government could issue “pollution permits,” and allow the polluters to trade them to achieve pollution reduction at lowest cost

Key policy design issues• If can’t measure it, you can’t manage it

(methodological and data issues)• Role of causality—esp for AQ and climate change• Who should be made responsible for solving a

problem—keeping in mind jurisdictional challenges (who’s in charge and can do something about it)

• Market based approaches vs regulatory and voluntary instruments