Feebate Economics

Abstract

The feebate regulatory approach is not just a niche policy applicable only to vehicle incentives. Any good rationale for applying feebates to vehicles is an equally good reason for applying the same approach throughout the energy economy, and such policy instruments should be recognized as a viable option for comprehensive greenhouse gas regulation. Following is an outline of fundamental economic principles of feebates that economists, advocacy groups, and policy makers should understand.

Keywords: Cap and trade, Refunded tax, Feebate

JEL Classification: H21, K32, O38