Biofuels have received a great deal of attention globally, and many countries have embarked on producing biofuels, given the volatility and the recent all-time high of world oil prices.

International and domestic efforts to reduce greenhouse gas emissions require a coordinated effort from countries and individuals that differ in terms of their level of income, historical responsibility in terms of contributions to the existing stock of emissions, current intensity of energy use and costs of reducing emissions. This brief reports the results of an economic experiment that examines whether groups of individuals – who differ in terms of their individual costs of reducing emissions – can meet a collective emissions reduction target.

In the contingent valuation method, both the goods being valued and the payment vehicles used to value them are mostly hypothetical. However, although numerous studies have examined the impact of experience with the good on the willingness to pay, less attention has been given to experience with the payment vehicles.

Many cities worldwide have considered vehicle restriction policies to curb proliferating problems of traffic and pollution.

At the beginning of 2011, Beijing became the first city to allocate vehicle license plates using a lottery. We provide background on Beijing’s lottery, and analyze its short-term effects. We find that vehicle growth has been sharply curtailed, and congestion has been reduced.  However, this policy may not reduce fuel consumption as much as expected.

This disucssion paper has been peer-reviewed. Access it here.

The transport sector contributes almost a fifth of the current global emissions of greenhouse gases (GHG), and its share is likely to increase in the future. The US, Brazil, and a number of European and other countries worldwide have introduced various support schemes for biofuels.