Feebates promoting energy-efficient cars: Design options to address more consumers and possible counteracting effects
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.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kahneman, Daniel & Tversky, Amos, 1979.
"Prospect Theory: An Analysis of Decision under Risk,"
Econometric Society, vol. 47(2), pages 263-291, March.
- Amos Tversky & Daniel Kahneman, 1979. "Prospect Theory: An Analysis of Decision under Risk," Levine's Working Paper Archive 7656, David K. Levine.
- 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.
- 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.
- 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.
- Choo, Sangho & Mokhtarian, Patricia L., 2004. "What type of vehicle do people drive? The role of attitude and lifestyle in influencing vehicle type choice," University of California Transportation Center, Working Papers qt7vg1057g, University of California Transportation Center.
- 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.
- 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.
- Johnson, Kenneth C., 2006. "Feebates: An effective regulatory instrument for cost-constrained environmental policy," Energy Policy, Elsevier, vol. 34(18), pages 3965-3976, December.
- Turrentine, Thomas S. & Kurani, Kenneth S., 2007. "Car buyers and fuel economy?," Energy Policy, Elsevier, vol. 35(2), pages 1213-1223, February. Full references (including those not matched with items on IDEAS)