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Climate-Change Policy and CO2 Emissions from Passenger Vehicles 1 (October 2008)

handle is hein.congrec/cbo8862 and id is 1 raw text is: A series ofissue summaries from the Congressional Budget Office OCTOBER 6, 2008 Climate-Change Policy and CO2 Emissions from Passenger Vehicles Global climate change is among the most serious long- term challenges facing the nation. The accumulation of greenhouse gases in the atmosphere could have serious and costly effects throughout the world. Although the magnitude of those effects remains highly uncertain, there is growing recognition of the risk that it may be extensive and perhaps catastrophic. Reducing greenhouse-gas emissions would lower the eco- nomic and human health risks associated with a changing climate. The primary greenhouse gas is carbon dioxide (CO2), and according to the Environmental Protection Agency (EPA), about 20 percent of total U.S. emissions of CO are from passenger vehicles (cars and light trucks). Those emissions are directly related to the amount of gas- oline a vehicle uses, which in turn depends on the num- ber of miles the vehicle is driven and on its fuel economy. For many households, the choices of which car to drive and how much to drive it are among the most visible ways in which individuals contribute to climate change. Yet research suggests that policies to reduce greenhouse- gas emissions by setting a price on them (through a cap- and-trade system or a carbon tax, for example) would have relatively little effect on vehicle emissions. Instead, most of the reductions would come from other sources- particularly electric power generators-from which emis- sions might be reduced at lower cost. A cap-and-trade system or a carbon tax would raise the price of gasoline, encouraging consumers to drive less and to buy vehicles that are more fuel efficient, but the effects on the price of gasoline and on consumers' choice of vehi- cles and driving behavior would be modest under most policy proposals. For example, despite the recent dra-