A Stitch in Haste

The rising price of gasoline and other fuels, both before and after the New Orleans disaster, have prompted some governments, at various levels, to attempt to intervene in the petroleum markets. Hawaii is implementing price ceilings on wholesale gasoline, the federal government is tapping into the Strategic Petroleum Reserve, several hack state politicians are calling for suspending gasoline taxes.

Mexico City has its own ongoing anti-market policies for gasoline. The motivation is not a gasoline shortage, but rather a glut — the geography of the city (i.e., an elevated valley) results in a limited air flow into and out of the city. As a result, vehicle emissions tend to accumulate to uncomfortable and even hazardous levels. You see far more people walking around wearing respiratory masks here than in New York City.

To cut vehicle use, Mexico City implemented mandatory gasoline rationing analogous to the old "odd-even" program in the U.S. during the energy crisis of the 1970s. Mexico City's program is called "Hoya No Circular" or "No Driving Today" --

[T]he city enforces a ban on each vehicle during the week based on the final digit of its license plate. ... Monday: No driving if final digit is five or six. Tuesday: No driving if final digit is seven or eight. [Etc.]

Theoretically, this should have reduced vehicle emissions by one-seventh, right?

Wrong. Vehicle emissions have actually increased under Hoya No Circular:

Instead of using public transport, the city's moneyed classes simply bought second or third vehicles, often cheaper used autos with higher emissions. Since the program was introduced, the number of private vehicles in circulation has soared an estimated 40 percent.

Why do I suspect that no economistas, especially no economistas libre marcado, were consulted when the Hoya No Circular program was crafted?

For Discussion: Assume that the air quality problem in Mexico City is so bad (trust me, it is), that it qualifies as a bona fide "Tragedy of the Commons." How should the government deal with problem? Higher gasoline taxes? More mass transit? Prohibiting ownership of multiple vehicles? Government-subsidized health care for respitory ailments? What are the assorted effects, and side effects, of the various possible solutions?

Source: Moon Handbooks' Mexico City.