Designing Carbon Taxation Schemes for Automobiles: A Simulation Exercise for Germany
36 Pages Posted: 31 Jan 2012
There are 4 versions of this paper
Welfare Implications of Automobile Feebates: A Simulation Analysis
Welfare Implications of Automobile Feebates: A Simulation Analysis
Designing Carbon Taxation Schemes for Automobiles: A Simulation Exercise for Germany
Date Written: January 2012
Abstract
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.
Keywords: carbon taxation, CO2 emissions, feebates, German automobile market
JEL Classification: L92, Q52, Q58
Suggested Citation: Suggested Citation
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