Welfare Implications of Automobile Feebates: A Simulation Analysis
University of Cyprus - Department of Economics
University of Cyprus - Department of Economics; Centre for Economic Policy Research (CEPR); University of Bologna - Rimini Center for Economic Analysis (RCEA)
Cyprus University of Technology
Vehicle taxation based on CO2 emissions is increasingly being adopted worldwide in order to shift consumer purchases to low-carbon cars, yet little is known about the effectiveness and overall economic impact of these schemes. We focus on feebate schemes, which impose a fee on high-carbon vehicles and give a rebate to purchasers of low-carbon automobiles. We estimate a discrete choice model of demand for automobiles in Germany and simulate the impact of alternative feebate schemes on emissions, consumer welfare, public revenues and firm profits. The analysis shows that a well-designed scheme can lead to emission reductions without reducing overall welfare.
Number of Pages in PDF File: 31
Keywords: CO2 emissions, feebates, environmental taxation, carbon taxation
JEL Classification: Q52, Q58, L92working papers series
Date posted: January 5, 2012 ; Last revised: December 19, 2012
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollo3 in 0.343 seconds