The Effect of Registration Taxes on New Car Sales and Emissions: Evidence from Switzerland

CER-ETH Economics Working Paper 16/245

43 Pages Posted: 3 May 2016 Last revised: 28 Aug 2016

Anna Alberini

University of Maryland - Department of Agricultural & Resource Economics; Fondazione Eni Enrico Mattei (FEEM)

Markus Bareit

ETH Zürich - CER-ETH - Center of Economic Research at ETH Zurich

Date Written: August 2016

Abstract

In Switzerland, the annual circulation taxes on road vehicles are set by and paid to the cantons (not to the federal government). We exploit the 26 different circulation tax rules and their variation over time, which we interpret as a natural experiment, to see if linking them to a vehicle’s CO2 emissions rate has helped shift new car sales towards cleaner, lower-emitting vehicles. We find that even when the penalty associated with a highly polluting vehicle is high, the effect is relatively small. For example, in canton Zurich, imposing a 50% “malus” on the annual registration fee for cars that emit 200 or more grams of CO2 per kilometer reduces the average CO2 emissions rate from new cars by only 0.46 gram per kilometer, bringing it to 158.11 grams per kilometer in 2011. A similar effect would be attained with a modest increase in fuel taxes.

Keywords: vehicle demand estimation, fuel economy, fuel taxes, vehicle taxes, carbon dioxide

JEL Classification: L62, Q4, Q5

Suggested Citation

Alberini, Anna and Bareit, Markus, The Effect of Registration Taxes on New Car Sales and Emissions: Evidence from Switzerland (August 2016). CER-ETH Economics Working Paper 16/245. Available at SSRN: https://ssrn.com/abstract=2773272 or http://dx.doi.org/10.2139/ssrn.2773272

Anna Alberini

University of Maryland - Department of Agricultural & Resource Economics ( email )

Symmons Hall, Rm 2200
University of Maryland
College Park, MD 20742-5535
United States
301-405-1267 (Phone)
301-314-9091 (Fax)

Fondazione Eni Enrico Mattei (FEEM)

C.so Magenta 63
Milano, 20123
Italy

Markus Bareit (Contact Author)

ETH Zürich - CER-ETH - Center of Economic Research at ETH Zurich ( email )

Zürichbergstrasse 18
Zurich, 8092
Switzerland

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