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Are the Costs of Reducing Greenhouse Gases from Passenger Vehicles Negative?

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  • Parry, Ian W.H.

    () (Resources for the Future)

Abstract

Energy models suggest that the cost of reducing carbon emissions from the transportation sector is high relative to other sectors, such as electricity generation. However, this paper shows that taxes to reduce passenger vehicle emissions produce large net benefits, rather than costs, when account is taken of (a) their impact on reducing non-carbon externalities from passenger vehicle use, and (b) interactions with the broader fiscal system. Both of these considerations also strengthen the case for using a tax-based approach to reduce emissions over fuel economy regulation, while fiscal considerations strengthen the case for taxes over (non-auctioned) emissions permits.

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Bibliographic Info

Paper provided by Resources For the Future in its series Discussion Papers with number dp-06-14-rev.

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Date of creation: 07 Dec 2006
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Handle: RePEc:rff:dpaper:dp-06-14-rev

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Keywords: carbon policies; passenger vehicles; externalities; welfare costs;

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References

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Citations

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Cited by:
  1. Toshimitsu, Tsuyoshi, 2010. "On the paradoxical case of a consumer-based environmental subsidy policy," Economic Modelling, Elsevier, vol. 27(1), pages 159-164, January.
  2. Kok, Robert & Annema, Jan Anne & van Wee, Bert, 2011. "Cost-effectiveness of greenhouse gas mitigation in transport: A review of methodological approaches and their impact," Energy Policy, Elsevier, vol. 39(12), pages 7776-7793.
  3. Philippe Barla & Stef Proost, 2008. "Automobile fuel efficiency policies with international innovation spillovers," Center for Economic Studies - Discussion papers ces0817, Katholieke Universiteit Leuven, Centrum voor Economische Studiën.
  4. Van Dender, Kurt, 2009. "Energy policy in transport and transport policy," Energy Policy, Elsevier, vol. 37(10), pages 3854-3862, October.

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