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Market-Based Policies for Green Motoring in Canada

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  • Werner Antweiler
  • Sumeet Gulati

Abstract

The most effective policy to address environmental externalities from vehicular fuel use is an appropriate fuel tax. Instead of raising fuel taxes, Canada's provincial and federal governments prefer to subsidize the purchase of fuel-efficient vehicles and the accelerated retirement of old vehicles. Are these programs effective? Can they be improved? We argue that subsidies for hybrids and electric vehicles are not cost-effective and instead recommend building on Canada's brief and modest experience with ”feebates." While British Columbia's pioneering accelerated vehicle retirement program is cost-effective, its success rests significantly on inducing participants to switch from personal vehicles to alternative transportation modes. Policy refinements will be needed to adapt the lessons learnt from this program to less favourable conditions elsewhere in Canada.

Suggested Citation

  • Werner Antweiler & Sumeet Gulati, 2013. "Market-Based Policies for Green Motoring in Canada," Canadian Public Policy, University of Toronto Press, vol. 39(s2), pages 81-94, August.
    • Handle: RePEc:cpp:issued:v:39:y:2013:i:s2:p:81-94
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    References listed on IDEAS

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    1. repec:eee:eneeco:v:68:y:2017:i:c:p:454-465 is not listed on IDEAS
    2. Larson, Paul D. & Viáfara, Jairo & Parsons, Robert V. & Elias, Arne, 2014. "Consumer attitudes about electric cars: Pricing analysis and policy implications," Transportation Research Part A: Policy and Practice, Elsevier, vol. 69(C), pages 299-314.

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