The Kyoto Protocol mandates that the U.S. reduce emissions of greenhouse gases to 93% of their 1990 levels by the period 2008–2012. This paper explores the possibility of reducing carbon dioxide emissions in the transportation sector to 7% below their 1990 level by 2010. This paper examines two policies to achieve these reductions Corporate Average Fuel Efficiency standards and gasoline taxes. The introduction of these policies individually makes the task seem daunting, yet when using the policies jointly the objective is achievable.(JELQ38, Q48, R48)
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Agras et al. (1999) studied this question.
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