Unintended Consequences From Nested State & Federal Regulations: The Case Of The Pavley Greenhouse-Gas-Per-Mile Limits

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Executive Summary

Fourteen U.S. states recently pledged to adopt limits on Greenhouse Gases (GHGs) per mile of light-duty automobiles. Previous analyses predicted this action would significantly reduce emissions from new cars in these states, but ignored possible offsetting emissions increases from policy-induced adjustments in new car markets in other (non-adopting) states and in the used car market. This research examines a particular instance of a general issue of policy significance - namely, problems from "Nested" federal and state environmental regulations. Such nesting implies that similar leakage difficulties are likely to arise under several newly proposed state-level initiatives.

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