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A green reform is not always green

  • Fosgerau, Mogens
  • Jensen, Thomas C.

This paper analyses a tax reform, explicitly conceived by policy makers to be climate-friendly, that partly replaces a high vehicle registration tax by road user charging and allows for differentiation of the remaining registration tax by fuel efficiency. A microeconomic framework is proposed to analyse such a reform. For the case of Denmark, the analysis shows that the reform is likely to yield a significant and robust welfare gain. However, it seems not unlikely that CO2 emissions from passenger cars may increase as a result of the reform.

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File URL: http://mpra.ub.uni-muenchen.de/42264/1/MPRA_paper_42264.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 42264.

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Date of creation: 2013
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Handle: RePEc:pra:mprapa:42264
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  1. Vickrey, William S, 1969. "Congestion Theory and Transport Investment," American Economic Review, American Economic Association, vol. 59(2), pages 251-60, May.
  2. Arnott, Richard & de Palma, Andre & Lindsey, Robin, 1993. "A Structural Model of Peak-Period Congestion: A Traffic Bottleneck with Elastic Demand," American Economic Review, American Economic Association, vol. 83(1), pages 161-79, March.
  3. Parks, Richard W, 1977. "Determinants of Scrapping Rates for Postwar Vintage Automobiles," Econometrica, Econometric Society, vol. 45(5), pages 1099-1115, July.
  4. de Palma, Andre & Kilani, Moez, 2008. "Regulation in the automobile industry," International Journal of Industrial Organization, Elsevier, vol. 26(1), pages 150-167, January.
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