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Promoting Urban Sustainability: The Case for a Tradable Supplementary Licence System for Vehicle Use

Department of Economics, University of Cincinnati, Cincinnati, Ohio 45221-0371, USA, aynes. Goddard{at}uc.edu.

Many large cities in the world have serious regional air-quality problems, largely the product of vehicular emissions, and one manifestation of the argued insustain ability of current urban growth patterns. These problems are frequently blamed on unrestricted use of private vehicles. This paper applies the concept of sustainability to urban areas by formulating an explicit ecological constraint on airshed capacity in a region within a model of cost-effective emissions control. Solution of the model suggests that restrictions on vehicle use should play a role in achieving regional air-quality targets cost-effectively. A tradable vehicle-use permit system is described for implementing the sustainability constraint, and its relationship to other demand management proposals for constraining vehicle use is discussed, as well as the implications for the form and vitality of urban areas. This control policy would have substantially favourable impacts on air quality, vehicle congestion and uncontrolled suburban development and, given the general political unacceptability of environmental taxes, could form part of a workable and politically palatable set of policies to control greenhouse-gas emissions from the transport sector. The proposed vehicle-use permits mechanism represents a natural extension of current discussions for globally tradable carbon emission permits, and could be a principal method by which such national carbon emissions budgets might be allocated regionally.

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