Air Pollution

Air pollution concentrations have been rapidly increasing in the major

urban areas of Brazil caused mainly by the increasing use of
vehicles. Policies to control car emissions in Brazil have relied
basically on mandatory emission standards and subsidies for specific
cleaner technology resulting in substantial decrease of car emission
rates. Nevertheless, taxes on car sales, differentiated by vehicles'
size and fuel, have also influenced car emission patterns. This paper
analyses the compliance trend of the Brazilian fleet with
environmental standards between 1992 and 1997. We find that larger
automobiles had the fastest compliance schedule while popular
models adjusted very slowly. Also gasoline-fuelled models had a
faster adjustment pattern than ethanol cars.
Additionally, we analyze the current relationship between pollution
emissions and car characteristics in order to orient policy formulation.
We find a positive relationship between emissions rates and horse
power, concluding that although the current value-added sale car tax
is not environmental harmful, a tax differentiating clean from dirty
models, within each tax bracket, could create substantial incentives
for emission control in the future.

Urban air pollution is a serious environmental problem in developed

as well as in most developing countries. In the case of Brazil, air
pollution concentrations have been rapidly increasing in the major
urban areas over the last decades. As elsewhere, this expansion has
been caused mainly by the increasing use of vehicles. Today,
emissions from vehicles are the major source of air pollution in
Brazil's largest cities. In 1997 in São Paulo, for example, private cars
were responsible for approximately 75% of carbon monoxide (CO),
73% of hydrocarbons (HC), 23% of nitrogen oxides (NOx) and 10%
particulate matter (PM)