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Feebates promoting energy-efficient cars: Design options to address more consumers and possible counteracting effects

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  • Peters, Anja
  • Mueller, Michel G.
  • de Haan, Peter
  • Scholz, Roland W.
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    Abstract

    An increasing number of countries have implemented or are evaluating feebate systems in order to reduce energy consumption of new vehicle registrations. We distinguish between absolute feebates based strictly on a vehicle's energy consumption and relative feebates normalizing energy consumption by a given car utility. This paper analyzes whether absolute or relative feebates encourage more consumers to change to vehicles with lower energy consumption. We combine an analysis of all car models on sale at the end of 2005 with survey data from 326 potential new car buyers. Analysis of the car fleet with regard to behavioral changes assumed as realistic shows that relative systems succeed better in offering more consumer groups cars that are eligible for incentives. Survey results suggest that consumers show some, but limited, willingness to change behavior to obtain an incentive. However, a relative system potentially allows people to switch to cars with higher relative efficiency without actually lowering absolute CO2 emissions. We discuss this inherent dilemma of simultaneously addressing more consumers and limiting counteracting effects. In order to find the optimal trade-off, we suggest assessing different parameters operationalizing vehicle utility by means of micro-simulation with detailed car fleet and differentiated consumer segments.

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    Bibliographic Info

    Article provided by Elsevier in its journal Energy Policy.

    Volume (Year): 36 (2008)
    Issue (Month): 4 (April)
    Pages: 1355-1365

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    Handle: RePEc:eee:enepol:v:36:y:2008:i:4:p:1355-1365

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    Web page: http://www.elsevier.com/locate/enpol

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    References

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    1. Johnson, Kenneth C., 2006. "Feebates: An effective regulatory instrument for cost-constrained environmental policy," Energy Policy, Elsevier, vol. 34(18), pages 3965-3976, December.
    2. Choo, Sangho & Mokhtarian, Patricia L., 2004. "What type of vehicle do people drive? The role of attitude and lifestyle in influencing vehicle type choice," Transportation Research Part A: Policy and Practice, Elsevier, vol. 38(3), pages 201-222, March.
    3. Kahneman, Daniel & Tversky, Amos, 1979. "Prospect Theory: An Analysis of Decision under Risk," Econometrica, Econometric Society, vol. 47(2), pages 263-91, March.
    4. Train, Kenneth E. & Davis, William B. & Levine, Mark D., 1997. "Fees and rebates on new vehicles: Impacts on fuel efficiency, carbon dioxide emissions, and consumer surplus," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 33(1), pages 1-13, March.
    5. Steg, Linda, 2005. "Car use: lust and must. Instrumental, symbolic and affective motives for car use," Transportation Research Part A: Policy and Practice, Elsevier, vol. 39(2-3), pages 147-162.
    6. Turrentine, Tom & Kurani, Kenneth S, 2007. "Car buyers and fuel economy?," Institute of Transportation Studies, Working Paper Series qt56x845v4, Institute of Transportation Studies, UC Davis.
    7. Turrentine, Thomas S. & Kurani, Kenneth S., 2007. "Car buyers and fuel economy?," Energy Policy, Elsevier, vol. 35(2), pages 1213-1223, February.
    8. Greene, David L. & Patterson, Philip D. & Singh, Margaret & Li, Jia, 2005. "Feebates, rebates and gas-guzzler taxes: a study of incentives for increased fuel economy," Energy Policy, Elsevier, vol. 33(6), pages 757-775, April.
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    Cited by:
    1. Brand, Christian & Anable, Jillian & Tran, Martino, 2013. "Accelerating the transformation to a low carbon passenger transport system: The role of car purchase taxes, feebates, road taxes and scrappage incentives in the UK," Transportation Research Part A: Policy and Practice, Elsevier, vol. 49(C), pages 132-148.
    2. Pauline Givord, 2011. "Essay on Four Issues in Public Policy Evaluation," Sciences Po publications info:hdl:2441/53r60a8s3ku, Sciences Po.
    3. Xavier d'Haultfoeuille & Pauline Givord & Xavier Boutin, 2012. "The environmental Effect of Green Taxation : The case of the french "Bonus/Malus"," Working Papers 2012-13, Centre de Recherche en Economie et Statistique.
    4. Girod, Bastien & de Haan, Peter, 2009. "GHG reduction potential of changes in consumption patterns and higher quality levels: Evidence from Swiss household consumption survey," Energy Policy, Elsevier, vol. 37(12), pages 5650-5661, December.
    5. Martin, Elliot & Shaheen, Susan & Lipman, Timothy & Camel, Madonna, 2014. "Evaluating the public perception of a feebate policy in California through the estimation and cross-validation of an ordinal regression model," Transport Policy, Elsevier, vol. 33(C), pages 144-153.
    6. Pauline Givord, 2011. "Essay on Four Issues in Public Policy Evaluation," Sciences Po publications info:hdl:2441/53r60a8s3ku, Sciences Po.
    7. repec:spo:wpecon:info:hdl:2441/53r60a8s3kup1vc9je5h30d2n is not listed on IDEAS
    8. Alex Coad & Peter de Haan & Julia Sophie Woersdorfer, 2008. "Consumer support for environmental policies: An application to purchases of green cars," Jena Economic Research Papers 2008-035, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
    9. Adamos Adamou & Sofronis Clerides & Theodoros Zachariadis, 2012. "Designing Carbon Taxation Schemes for Automobiles: A Simulation Exercise for Germany," University of Cyprus Working Papers in Economics 01-2012, University of Cyprus Department of Economics.
    10. Ozaki, Ritsuko & Sevastyanova, Katerina, 2011. "Going hybrid: An analysis of consumer purchase motivations," Energy Policy, Elsevier, vol. 39(5), pages 2217-2227, May.

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