Arbeitspapier

Fiscal Policy and CO2 Emissions of New Passenger Cars in the EU

T o what extent have national fiscal policies contributed to the decarbonisation of newly sold passenger cars? We construct a simple model that generates predictions regarding the effect of fiscal policies on average CO2 emissions of new cars, and then test the model empirically. Our empirical strategy combines a diverse series of data. First, we use a large database of vehicle-specific taxes in 15 EU countries over 2001-2010 to construct a measure for the vehicle registration and annual road tax levels, and separately, for the CO2 sensitivity of these taxes. We find that for many countries the fiscal policies have become more sensitive to CO2 emissions of new cars. We then use these constructed measures to estimate the effect of fiscal policies on the CO2 emissions of the new car fleet. The increased CO2-sensitivity of registration taxes have reduced the CO2 emission intensity of the average new car by 1,3 percent, partly through an induced increase of the share of diesel-fuelled cars by 6,5 percentage points. Higher fuel taxes lead to the purchase of more fuel efficient cars, but higher annual road taxes have no or an adverse effect.

Language
Englisch

Bibliographic citation
Series: Nota di Lavoro ; No. 32.2015

Classification
Wirtschaft
Fiscal Policies and Behavior of Economic Agents: General
Automobiles; Other Transportation Equipment; Related Parts and Equipment
Energy: Government Policy
Climate; Natural Disasters and Their Management; Global Warming
Environmental Economics: Government Policy
Transportation Economics: Government Pricing and Policy
Subject
Vehicle Registration Taxes
Fuel Taxes
CO2 Emissions

Event
Geistige Schöpfung
(who)
Gerlagh, Reyer
van den Bijgaart, Inge
Nijland, Hans
Michielsen, Thomas
Event
Veröffentlichung
(who)
Fondazione Eni Enrico Mattei (FEEM)
(where)
Milano
(when)
2015

Handle
Last update
10.03.2025, 11:42 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Gerlagh, Reyer
  • van den Bijgaart, Inge
  • Nijland, Hans
  • Michielsen, Thomas
  • Fondazione Eni Enrico Mattei (FEEM)

Time of origin

  • 2015

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