Arbeitspapier
The Gasoline Climate Trap
Due to taxes and subsidies, gasoline prices vary dramatically across countries. Externalities cannot fully account for this. We develop a simple political-economic model that shows that group interests, resulting from the composition of a country's car fleet, help to explain differences in gasoline taxes even among countries with identical fundamentals. In the model, citizens' car ownership is endogenous, which can yield multiple equilibria. Our model demonstrates the possibility of a society in a climate trap where a low gasoline tax reflects the views of a majority, but another majority would benefit from transitioning to an equilibrium with a higher gasoline tax and fewer emissions.
- Language
-
Englisch
- Bibliographic citation
-
Series: Tinbergen Institute Discussion Paper ; No. TI 2023-026/VII
- Classification
-
Wirtschaft
Externalities
Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies
Environmental Economics: Government Policy
- Subject
-
median voter
gasoline taxes
multiple equilibria.
- Event
-
Geistige Schöpfung
- (who)
-
Delfgaauw, Josse
Swank, Otto
- Event
-
Veröffentlichung
- (who)
-
Tinbergen Institute
- (where)
-
Amsterdam and Rotterdam
- (when)
-
2023
- Handle
- Last update
- 10.03.2025, 11:41 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Delfgaauw, Josse
- Swank, Otto
- Tinbergen Institute
Time of origin
- 2023
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