Working Paper: CEPR ID: DP8782
Authors: Adamos Adamou; Sofronis Clerides; Theodoros Zachariadis
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 Codes: L92; Q52; Q58
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| feebate system (H20) | CO2 emissions (Q54) |
| feebate system (H20) | consumer welfare (D69) |
| feebate system (H20) | firm profits (L21) |
| feebate system parameters (H21) | emissions and welfare outcomes (D69) |