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The environmental Effect of Green Taxation : The case of the french "Bonus/Malus"

Author

Listed:
  • Xavier d'Haultfoeuille

    () (Crest)

  • Pauline Givord

    () (INSEE)

  • Xavier Boutin

    (European Commission-Team)

Abstract

At the beginning of 2008 was introduced in France a feebate on the purchase of new cars called the "Bonus/Malus". Since January 2008, the less polluting cars benefited from a price reduction of up to 1,000 euros, while the most polluting ones were subject to a taxation of 2,600 euros. We estimate the impact of this policy on carbon dioxide emissions in the short and long run. These emissions depend on the market shares and the average emissions per kilometer of each car, but also on their manufacturing and the number of kilometers traveled by their owners. We first develop a simple tractable model that relates car choice and mileage. We then estimate this model, using both the exhaustive dataset of car registrations and a recent transportation survey which provides information on individual journeys. We show that if the shift towards the classes benefiting from rebates is spectacular, the environmental impact of the policy is negative. The reform has notably increased sales, leading to an important increase in manufacturing and traveling emissions. We thus stress that such policies may be efficient tools for reducing CO2 emissions (French consumers do react to the feebate in their car choice), but should be designed with care to achieve their primary goal

Suggested Citation

  • Xavier d'Haultfoeuille & Pauline Givord & Xavier Boutin, 2012. "The environmental Effect of Green Taxation : The case of the french "Bonus/Malus"," Working Papers 2012-13, Center for Research in Economics and Statistics.
  • Handle: RePEc:crs:wpaper:2012-13
    as

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    References listed on IDEAS

    as
    1. Peters, Anja & Mueller, Michel G. & de Haan, Peter & Scholz, Roland W., 2008. "Feebates promoting energy-efficient cars: Design options to address more consumers and possible counteracting effects," Energy Policy, Elsevier, vol. 36(4), pages 1355-1365, April.
    2. Jerome Adda & Russell Cooper, 2000. "Balladurette and Juppette: A Discrete Analysis of Scrapping Subsidies," Journal of Political Economy, University of Chicago Press, vol. 108(4), pages 778-806, August.
    3. Soren T. Anderson & James M. Sallee, 2011. "Using Loopholes to Reveal the Marginal Cost of Regulation: The Case of Fuel-Economy Standards," American Economic Review, American Economic Association, vol. 101(4), pages 1375-1409, June.
    4. Fullerton, Don & West, Sarah E., 2002. "Can Taxes on Cars and on Gasoline Mimic an Unavailable Tax on Emissions?," Journal of Environmental Economics and Management, Elsevier, vol. 43(1), pages 135-157, January.
    5. Maxim Engers & Monica Hartmann & Steven Stern, 2009. "Annual miles drive used car prices," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 24(1), pages 1-33.
    6. Sallee, James M. & Slemrod, Joel, 2012. "Car notches: Strategic automaker responses to fuel economy policy," Journal of Public Economics, Elsevier, vol. 96(11), pages 981-999.
    7. Cardell, N. Scott, 1997. "Variance Components Structures for the Extreme-Value and Logistic Distributions with Application to Models of Heterogeneity," Econometric Theory, Cambridge University Press, vol. 13(02), pages 185-213, April.
    8. 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.
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    More about this item

    Keywords

    Environmental taxation; automobiles; carbon dioxide emissions; policy evaluation;

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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