Pollution Permits System as Essential Effort in Sustainable Transportation
What is Pollution Permits System? What has been done in its application?
Bente de Leeuw, Denissa Purba, Robert Zhang
University of Illinois at Urbana-Champaign
“Transportation sector is responsible for over 55% of nitrogen oxides (NOx) total emissions inventory, about 10% of volatile organic compounds (VOCs) emissions, about 10% of particulate PM2.5 and PM10 emission, and 28.2 % of total greenhouse gas (GHG) emissions in the US” — EPA[1]
Despite its importance in supporting socioeconomics needs, transportation contributes significant amounts of emissions and pollutants to urbans. EPA[2] highlighted that transportation generates the largest share of emissions and pollutions across the United States. WHO[3] urged that these such large and long-term exposure of emissions and pollutions without immediate intervention to transportation policy will stimulate the vulnerability in three critical sectors, i.e. (1) Climate Environment, (2) Public Health, and (3) Public Equity.
One strategic policy in enforcing sustainability transportation is Pollution Permits System. This policy scheme regulates the permits and authorizations of vehicles or other instruments in accessing each road segment to control the total emission and pollutions rate of the roads or targeted zones.
First Conceptualization
The initial concept of pollutions permits system is introduced by Montgomery[4] in 1972. He defined a “pollution license” as the right to emit pollutants at a rate that will cause no more than a specified increase in pollution level at a certain point.
Montgomery (1972) and Nagurney (2000) propose the Pollutions Licenses model using the network formulation[4,5]. Initially, given the air quality standards or pollutions’ limits of the network, we pre-determine the initial allocation of licenses and each road segment’s performance. Then, considering the behavior principle of transportation, the goal is to determine the best pollution permits allocation for each road and the optimal license price to obtain sustainable transportation that satisfies the air quality standards.
Notice, the traveler time cost and the license policy influence the traveler decision on choosing their route. By solving the system for user equilibrium, with the determined link performance functions and the demand, the number of licenses at equilibrium can be determined. This model will give the pollution licenses price at equilibrium.
Pollution Permits System #1: Vehicle Quota System
In 1990, the Singapore Government introduced a vehicle quota system to control vehicles’ growth. Singapore became the first country in the world to introduce a vehicle quota system. This experience could be useful for other countries that are seriously trying to tackle road congestion and environmental pollution.
In this policy, the pollution permits system is implemented as a controlled vehicle quota policy in each intervention road and zone. In Singapore, every vehicle must have a certificate of entitlement (COE), and they are auctioned monthly with changing the price.
There are eight categories for COE[6] based primarily on intended car usage and engine capacity to precisely control the traffic volume and environmental pollution. With these categories, bidders can be segmented into several groups and apply dynamic supply to various demands.
Every year, the government announces the current traffic conditions and the number of vehicles’ growth rate with the road capacity. Then, the government uses it to determine the quotas for individual categories after checking the current number of vehicles and the number of vehicles that have been deregistered at the end of the registration. With these approaches, the congestions decreased, and the air pollution was also well controlled. Therefore, Singapore’s vehicle quota system remains as one promising pollution license and permits system for sustainable transportation networks in practice.
Pollution Permits System #2: (Ultra) Low Emission Zone
A common policy for reducing particulate matter concentrations in the European Union is the introduction of Low Emission Zones (LEZs), which may only be entered by vehicles meeting predefined emission standards. It is currently introduced in 13 European countries[7].
In Europe, vehicle emissions are classified by the so-called “Euro Standards” with a current range from Euro 1 to Euro 6 regarding the vehicles’ technical features fixed in several EU-Directives for passenger cars heavy-duty trucks. This policy allocates the pollution permits of the vehicles concerning its Euro emission level.
LEZs are believed to be one of the most effective measures that cities can take to reduce vehicle-induced air pollution problems in their area8. In 2019, Central London also announced a new policy, Ultra Low Emission Zones (ULEZ), where vehicles must meet strict emission standards to drive in the central London ULEZ area or pay a charge. The new policy received positive responses and impacts in improving the environmental quality in Central London. Currently, the government proposes an expansion region for ULZ.
REFERENCES
1 United States Environmental Protection Agency, “Smog, Soot, and Other Air Pollution from Transportation,” 16 October 2020. [Online]. Available: https://www.epa.gov/transportation-air-pollution-and-climate-change/smog-soot-and-local-air-pollution. [Accessed 29 October 2020].
2 United States Environmental Protection Agency, “Greenhouse Gas Emissions: Sources of Greenhouse Gas Emissions,” [Online]. Available: https://www.epa.gov/ghgemissions/sources-greenhouse-gas-emissions#:~:text=Transportation%20(28.2%20percent%20of%202018,ships%2C%20trains%2C%20and%20planes.. [Accessed 5 December 2020].
3 World Health Organization, “Ambient air pollution: Health impacts,” [Online]. Available: https://www.who.int/airpollution/ambient/health-impacts/en/#:~:text=An%20estimated%204.2%20million%20premature,and%20disease%20from%20lung%20cancer. [Accessed 5 December 2020].
4 Montgomery, W. D. (1972). Markets in licenses and efficient pollution control programs., Journal of economic theory, vol. 5, no. 3, pp. 395–418.
5 Nagurney, A. (2000). Sustainable Transportation Networks, Edward Elgar Publishing
6 Koh, W. T., & Lee, D. K. (1994). The vehicle quota system in Singapore: an assessment. Transportation Research Part A: Policy and Practice, 28(1), 31–47.
7 LEZEN (2013) Low emission zone in Europe network. Available from: http:// www.lowemissionzones.eu. [Accessed 5 December 2020].
8 Morfled, P., Groneberg, D.A., Spallek, M.F. (2014). Effectiveness of low emission zones: Large scale analysis of changes in environmental NO2, NO and NOx concentrations in 17 German cities. PLOS ONE, 9(8), e102999.
9 E. Kontou, “CEE 598 UTM Lecture Notes,” University of Illinois at Urbana-Champaign, 2020.
