Walls, Nelson, Safirova
Telecommuting and Environmental Policy
those people who do it most often. The workers who adopt later are thus pulling down the average in
the later years.
Combining the commute length with the frequency with which the commute is made leads to an
estimate of commute PMT. Average PMT has increased slightly over time, for both telecommuters and
non-telecommuters. This is a result of longer commutes. Non-telecommuters have higher average PMT
than telecommuters but the difference declines in the later part of the sample period until the final three
quarters when PMT is the same for the two groups. The same trends hold for VMT, but the difference
between VMT for telecommuters and non-telecommuters is greater than the difference between PMT
for the two groups. The authors look at VMT for respondents who reported “drove alone” as their
commute mode and also at VMT for respondents who reported any commute mode that included use of
a personal vehicle. Trends are the same for both measures of VMT.
Unfortunately, the study does not include travel diaries so there is no measure of driving other
than for commute purposes. Also, drawing conclusions on data based on survey respondents’ memories
of their commute modes, distances, times traveled, and telecommuting behavior for each quarter up to
ten years ago is likely to be problematic. The attempt to obtain a time series of telecommuting and other
data is laudable since no other study, to our knowledge, includes such information, but it would be
better to survey workers contemporaneously over a period of time rather than rely on memories.9
Overall, the studies support the hypothesis that telecommuting reduces VMT and emissions.
However, there is very little evidence to address the question by how much. However, for the purposes
of quantification of the telecommuting emissions credit, this is a critical question. Unfortunately, in
order to accurately quantify travel and emissions reductions, one needs data from detailed travel diaries
or from a complete record of motorist’s movements. To the best of our knowledge, such data have not
yet been applied to studies of telecommuting behavior.
3. Regulatory and institutional framework for mobile source emissions trading
We begin by briefly discussing the past US experience with emissions trading in general, and
with emissions trading of mobile sources in particular. As evident from the description below, since
government regulation is a prerequisite for the market of emissions, a clear regulatory framework is a
necessary, but not a sufficient condition of emissions trading success.
3.1. Introduction to Emissions Trading
Emissions trading is a fairly simple concept, even though in practice many complexities arise.
Because firms differ in their ability to reduce pollution, there are potential benefits from specialization
through gains from trade. Instead of forcing high-cost firms to reduce emissions by some fixed amount
or to install expensive technology, it is more cost-effective to allow them to purchase needed reductions
from those who can reduce emissions cheaply. By improving the allocation of costs, emissions trading
should enable a given environmental goal to be achieved at a lower total cost to society. In theory, the
efficient outcome will occur when the marginal cost of abatement is equalized across polluters.
The intellectual origins of emissions trading date back to Coase’s (1960) argument for assigning
transferable property rights for “bads,” such as pollution. The explicit application of this approach to
environmental policy was developed separately by Crocker (1966) and Dales (1968). An advantage of
emissions trading is that it frees the regulator from the substantial informational requirements associated
with command-and-control regulation or a system of pollution fees. The value of the emissions rights is
determined through the market rather than by a centralized authority, and the regulatory agency can
simply set the desired emissions target without reference to the various firms’ abatement cost functions
or pollution damage functions.
9 This is one virtue of the pilot Ecommute program. See section 5 of this paper and Walls and Nelson (2004) for
analysis of three years of daily commute logs of participants in this program.