Economic incentives to reduce pollution from road transport: the case for vehicle characteristics taxes
Although economists have long been advocating the use incentive-based policies to internalise the external costs of pollution from road transport, implementation of a "pigovian" tax presents considerable practical difficulties. As such, a number of "second-best" policies have been suggested, and this article presents the case for a vehicle characteristics tax. It is argued that such taxes, when used in conjunction with a fuel tax, can lead to outcomes that are more economically efficient than many of the other measures proposed or implemented. The argument is given some support by an analysis of vehicular emissions in the American vehicle stock.
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Volume (Year): 6 (1999)
Issue (Month): 2 (April)
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