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Economic incentives to reduce pollution from road transport: the case for vehicle characteristics taxes

  • Johnstone, N.
  • Karousakis, K.

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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Article provided by Elsevier in its journal Transport Policy.

Volume (Year): 6 (1999)
Issue (Month): 2 (April)
Pages: 99-108

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Handle: RePEc:eee:trapol:v:6:y:1999:i:2:p:99-108
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  1. Innes, Robert, 1996. "Regulating Automobile Pollution under Certainty, Competition, and Imperfect Information," Journal of Environmental Economics and Management, Elsevier, vol. 31(2), pages 219-239, September.
  2. Gruenspecht, Howard K, 1982. "Differentiated Regulation: The Case of Auto Emissions Standards," American Economic Review, American Economic Association, vol. 72(2), pages 328-31, May.
  3. Dowlatabadi, Hadi & Lave, Lester B & Russell, Armistead G, 1996. "A free lunch at higher CAFE? A review of economic, environmental and social benefits," Energy Policy, Elsevier, vol. 24(3), pages 253-264, March.
  4. Khazzoom J, Daniel, 1995. "An Econometric Model of the Regulated Emissions for Fuel-Efficient New Vehicles," Journal of Environmental Economics and Management, Elsevier, vol. 28(2), pages 190-204, March.
  5. Harrington, Winston, 1997. "Fuel Economy and Motor Vehicle Emissions," Journal of Environmental Economics and Management, Elsevier, vol. 33(3), pages 240-252, July.
  6. Faiz, Asif, 1993. "Automotive emissions in developing countries-relative implications for global warming, acidification and urban air quality," Transportation Research Part A: Policy and Practice, Elsevier, vol. 27(3), pages 167-186, May.
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