Konferenzbeitrag
From fuel taxation to efficiency standards: A wrong turn in European climate protection?
Using household travel diary data collected in Germany between 1997 and 2012, we employ an instrumental variable (IV) approach that enables us to consistently estimate both fuel price and efficiency elasticities at once. The aim is to gauge the relative impacts of fuel economy standards and fuel taxes on distance traveled. We find that the magnitude of the elasticity estimates are statistically indistinguishable: higher fuel prices reduce driving by the same degree as higher fuel efficiency increases driving. This finding indicates an offsetting effect of fuel efficiency standards on the effectiveness of fuel taxation, calling into question the efficacy of the European Commission's current efforts to legislate CO2 emissions limits for new cars given prevailing high fuel taxes. The ecological implications of this legislation for emissions reductions is explored through a simple numerical simulation using the econometric estimates.
- Language
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Englisch
- Bibliographic citation
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Series: Beiträge zur Jahrestagung des Vereins für Socialpolitik 2015: Ökonomische Entwicklung - Theorie und Politik - Session: Automobiles and the Environment ; No. F13-V2
- Classification
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Wirtschaft
Consumer Economics: Empirical Analysis
Multiple or Simultaneous Equation Models: Instrumental Variables (IV) Estimation
Energy: Demand and Supply; Prices
- Event
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Geistige Schöpfung
- (who)
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Vance, Colin
Frondel, Manuel
- Event
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Veröffentlichung
- (when)
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2015
- Handle
- Last update
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10.03.2025, 11:42 AM CET
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
- Konferenzbeitrag
Associated
- Vance, Colin
- Frondel, Manuel
Time of origin
- 2015
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