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Emissions-Based Vehicle Tax Reform for Cyprus: A Simulation Analysis

Author

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  • Tryfonas Christodoulou

    (Department of Economics,University of Cyprus)

  • Sofronis Clerides

    (Department of Economics,University of Cyprus)

Abstract

Several policy tools are being employed or debated as possible ways of curbing carbon emissions in the transportation sector. One such instrument is the taxation of vehicle purchases, often in the form of feebates. We estimate a model of demand for automobiles in Cyprus and simulate scenarios under which (i) a feebate scheme is introduced in addition to existing taxes and (ii) the existing consumption tax is completely replaced by an emissions-based tax. The analysis provides a useful quantification of the tradeoffs between government revenue, consumer welfare from vehicle use and environmental harm from emissions.

Suggested Citation

  • Tryfonas Christodoulou & Sofronis Clerides, 2012. "Emissions-Based Vehicle Tax Reform for Cyprus: A Simulation Analysis," Cyprus Economic Policy Review, University of Cyprus, Economics Research Centre, vol. 6(1), pages 3-20, June.
    • Handle: RePEc:erc:cypepr:v:6:y:2012:i:1:p:3-20
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    File URL: https://www.ucy.ac.cy/erc/documents/Christodoulou_Clerides_3-20.pdf
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    References listed on IDEAS

    as
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    2. 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.
    3. Adamou, Adamos & Clerides, Sofronis & Zachariadis, Theodoros, 2011. "Designing Carbon Taxation Schemes for Automobiles: A Simulation Exercise for Germany," Climate Change and Sustainable Development 120047, Fondazione Eni Enrico Mattei (FEEM).
    4. Greene, David L. & Patterson, Philip D. & Singh, Margaret & Li, Jia, 2005. "Corrigendum to "Feebates, rebates and gas-guzzler taxes: a study of incentives for increased fuel economy" [Energy Policy 33 (2005) 757-775]," Energy Policy, Elsevier, vol. 33(14), pages 1901-1902, September.
    5. Adamos Adamou & Sofronis Clerides & Theodoros Zachariadis, 2012. "Trade-offs in CO2-Oriented Vehicle Tax Reforms: A Case Study of Greece," Working Paper series 33_12, Rimini Centre for Economic Analysis.
    6. Poterba, James M., 1996. "Retail Price Reactions to Changes in State and Local Sales Taxes," National Tax Journal, National Tax Association;National Tax Journal, vol. 49(2), pages 165-176, June.
    7. Rogan, Fionn & Dennehy, Emer & Daly, Hannah & Howley, Martin & Ó Gallachóir, Brian P., 2011. "Impacts of an emission based private car taxation policy - First year ex-post analysis," Transportation Research Part A: Policy and Practice, Elsevier, vol. 45(7), pages 583-597, August.
    8. Fischer, Carolyn, 2008. "Comparing flexibility mechanisms for fuel economy standards," Energy Policy, Elsevier, vol. 36(8), pages 3106-3114, August.
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    Cited by:

    1. Adamos Adamou & Sofronis Clerides, 2013. "Tax Reform in the Cypriot Road Transport Sector," Cyprus Economic Policy Review, University of Cyprus, Economics Research Centre, vol. 7(1), pages 87-114, June.
    2. Itamar Milrad, 2018. "GREEN TAXATION: THE INFLUENCE AND DESIRABILITY OF THE FEEBATE SCHEME IN THE ISRAELI NEW CAR MARKETIn August 2009, a “green taxation”," Israel Economic Review, Bank of Israel, vol. 16(2), pages 1-36.
    3. Adamos Adamou & Sofronis Clerides, 2021. "The evolution of car ownership in Cyprus," Cyprus Economic Policy Review, University of Cyprus, Economics Research Centre, vol. 15(1), pages 1-15, June.
    4. repec:boi:isrerv:v:16:y:2019:i:2:p:1-36 is not listed on IDEAS

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    Keywords

    CO2 emissions; vehicle taxation; carbon taxes;
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