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A regression on climate policy: The European Commission’s legislation to reduce CO2 emissions from automobiles

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  • Frondel, Manuel
  • Schmidt, Christoph M.
  • Vance, Colin

Abstract

As part of its efforts to reach the targets of the Kyoto Protocol, in April 2009 the European Commission enacted new legislation to reduce the per-kilometer CO2 emissions of newly registered automobiles. This paper critically assesses this legislation with respect to its economic and technological underpinnings. First, we argue that the reliance on targets based on per-kilometer emissions not only conceals the true cost of compliance and thereby stifles informed public discourse, but is also less cost-effective than alternative measures such as emissions trading. Second, the emission targets stipulated in this legislation are based on linear-regression methods that we demonstrate to be poorly justified and misleading. Using instead stochastic-frontier analysis, which is argued to more accurately reflect the industry’s technological status quo, alternative targets are consequently proposed.

Suggested Citation

  • Frondel, Manuel & Schmidt, Christoph M. & Vance, Colin, 2011. "A regression on climate policy: The European Commission’s legislation to reduce CO2 emissions from automobiles," Transportation Research Part A: Policy and Practice, Elsevier, vol. 45(10), pages 1043-1051.
    • Handle: RePEc:eee:transa:v:45:y:2011:i:10:p:1043-1051
    DOI: 10.1016/j.tra.2009.12.001
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    References listed on IDEAS

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    1. Sterner, Thomas, 2007. "Fuel taxes: An important instrument for climate policy," Energy Policy, Elsevier, vol. 35(6), pages 3194-3202, June.
    2. Manuel Frondel & Christoph M. Schmidt, 2006. "The Empirical Assessment of Technology Differences: Comparing the Comparable," The Review of Economics and Statistics, MIT Press, vol. 88(1), pages 186-192, February.
    3. William J. Baumol & Wallace E. Oates, 1971. "The Use of Standards and Prices for Protection of the Environment," Palgrave Macmillan Books, in: Peter Bohm & Allen V. Kneese (ed.), The Economics of Environment, pages 53-65, Palgrave Macmillan.
    4. Manuel Frondel & Colin Vance, 2009. "Do High Oil Prices Matter? Evidence on the Mobility Behavior of German Households," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 43(1), pages 81-94, May.
    5. Manuel Frondel & Jorg Peters & Colin Vance, 2008. "Identifying the Rebound: Evidence from a German Household Panel," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 145-164.
    6. Kumbhakar,Subal C. & Lovell,C. A. Knox, 2003. "Stochastic Frontier Analysis," Cambridge Books, Cambridge University Press, number 9780521666633.
    Full references (including those not matched with items on IDEAS)

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