Air pollution continues to be a serious problem in many cities around the world in part because of a steady increase in car use. In an effort to contain such a trend and persuade drivers to give up their cars in favor of public transport, authorities increasingly rely on limits to car use. Some places have banned drivers from using their vehicles on certain days of the week. Good examples of these driving restrictions include Athens (where restrictions were introduced in 1982), Santiago (1986), Mexico City (1989), São Paulo (1996), Manila (1996), Bogotá (1998), Medellín (2005), Beijing (2008), and Tianjin (2008).
These restrictions may, however, create perverse incentives by encouraging people to purchase additional vehicles. This not only increases the number of vehicles but may also induce people to purchase higher-emitting vehicles. Mexico City’s Hoy No Circula program –which in 1989 prevented drivers from using their vehicles one day per week– confirm these fears. The ban didn’t reduce air pollution very much.
But there is an aspect of driving restrictions that has received little attention yet can be found in some recent restriction programs: namely, vintage-specific restrictions, or more precisely, restrictions that differentiate cars by their pollution rates. In 1992, for example, Santiago reformed its restriction program to exempt all cars equipped with a catalytic converter (a device that transforms toxic pollutants into less toxic gases) from the existing restriction that prevented all drivers from using their cars one day per week. This exemption ended in March 2018 for all cars built before 2012. Mexico City has also introduced several reforms to its restriction program. In today’s restriction program, new vehicles are exempt for their first eight years.
Vintage-specific restrictions are also in recent European programs. Authorities in Germany, for instance, have adopted low-emission zones in several cities since 2008. In 2016, the city of Paris banned any car built before 1997 from circulation within its limits weekdays from 8 a.m. to 8 p.m. Recent diesel bans in Madrid, London, Paris, and Rome, are another kind of vintage-specific restriction.
Of all the possible variations on a driving restriction policy one might think of, just banning older cars represents a radical departure from early designs. By allowing drivers to avoid being hurt by the restriction not by purchasing a second (and possibly older, more polluting) car but by switching to a cleaner car facing lighter or no restrictions, vintage-specific restrictions have the potential to significantly reduce air pollution.
How do these vintage-specific restrictions work in practice? Existing research suggest that it’s best for policymakers to design driving restrictions to work through the type of cars people purchase, never through how much they drive their cars.
By affecting purchasing decisions, a vintage-specific restriction can yield important welfare gains by moving the fleet composition toward cleaner cars. Emission rates vary widely across cars. That’s why in most cities older cars are responsible for most of the pollution. A driving restriction that places a uniform restriction upon all cars regardless of their pollution rate (like the one day a week driving ban) is sure to result in significant welfare losses. Such uniform policy not only fails to remove old cars from the road, it also reduces their prices, extending their lives and dampening sales of new cars.
Featured Image Credit: Traffic Rush Hour by quinntheislander. Public Domain via Pixabay.