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Designing Carbon Taxation Schemes for Automobiles: A Simulation Exercise for Germany

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  • Adamou, Adamos
  • Clerides, Sofronis
  • Zachariadis, Theodoros

Abstract

Vehicle taxation based on CO2 emissions is increasingly being adopted worldwide in order to shift consumer purchases to low-carbon cars, yet little is known about the effectiveness and overall economic impact of these schemes. We focus on feebate schemes, which impose a fee on high-carbon vehicles and give a rebate to purchasers of low-carbon automobiles. We estimate a discrete choice model of demand for automobiles in Germany and simulate the impact of alternative feebate schemes on emissions, consumer welfare, public revenues and firm profits. The analysis shows that a well-designed scheme can lead to emission reductions without reducing overall welfare.

Suggested Citation

  • Adamou, Adamos & Clerides, Sofronis & Zachariadis, Theodoros, 2012. "Designing Carbon Taxation Schemes for Automobiles: A Simulation Exercise for Germany," CEPR Discussion Papers 8782, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:8782
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    Cited by:

    1. Yan, Shiyu & Eskeland, Gunnar S., 2018. "Greening the vehicle fleet: Norway's CO2-Differentiated registration tax," Journal of Environmental Economics and Management, Elsevier, vol. 91(C), pages 247-262.
    2. 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.
    3. Adamos Adamou & Sofronis Clerides & Theodoros Zachariadis, 2012. "Assessment of CO2-Oriented Vehicle Tax Reforms: A Case Study of Greece," University of Cyprus Working Papers in Economics 04-2012, University of Cyprus Department of Economics.
    4. 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.

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    More about this item

    Keywords

    carbon taxation; CO2 emissions; feebates; German automobile market;
    All these keywords.

    JEL classification:

    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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