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Do policy incentives affect the environmental impact of private car use? Evidence from a sample of large cities


  • Keiko Hirota


  • Jacques Poot



In this paper we study the effectiveness of tax incentives and public transportation prices on the environmental impact of private motor vehicle use in OECD countries and in some non-OECD countries in Asia. We develop a model of energy consumption and CO2 emission by private motor vehicles in relation to private transportation infrastructure, public transportation prices, traffic conditions, the user cost of cars, and the income of car users. The user cost of cars is decomposed into acquisition, ownership and running cost. Each component is split into a tax/subsidy segment and a resource cost segment. Our model is estimated with data from 49 large cities, i.e. 40 from OECD countries and 9 from non-OECD countries in Asia. Structural differences in model outcomes between these two sets of countries are identified. Our results suggest that an incentive-based system that rewards higher environmental performance, such as differential tax rates by vehicle age, can be effective.

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  • Keiko Hirota & Jacques Poot, 2003. "Do policy incentives affect the environmental impact of private car use? Evidence from a sample of large cities," ERSA conference papers ersa03p493, European Regional Science Association.
  • Handle: RePEc:wiw:wiwrsa:ersa03p493

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    References listed on IDEAS

    1. Robert Noland & William Cowart, 2000. "Analysis of Metropolitan Highway Capacity and the growth in vehicle miles of travel," Transportation, Springer, vol. 27(4), pages 363-390, December.
    2. Gerard de Jong & Hugh Gunn, 2001. "Recent Evidence on Car Cost and Time Elasticities of Travel Demand in Europe," Journal of Transport Economics and Policy, University of Bath, vol. 35(2), pages 137-160, May.
    3. Espey, Molly, 1996. "Watching the fuel gauge: An international model of automobile fuel economy," Energy Economics, Elsevier, vol. 18(1-2), pages 93-106, April.
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    1. repec:eee:transa:v:103:y:2017:i:c:p:154-171 is not listed on IDEAS
    2. Timilsina, Govinda R. & Dulal, Hari B., 2008. "Fiscal policy instruments for reducing congestion and atmospheric emissions in the transport sector : a review," Policy Research Working Paper Series 4652, The World Bank.
    3. Tapio, Petri & Banister, David & Luukkanen, Jyrki & Vehmas, Jarmo & Willamo, Risto, 2007. "Energy and transport in comparison: Immaterialisation, dematerialisation and decarbonisation in the EU15 between 1970 and 2000," Energy Policy, Elsevier, vol. 35(1), pages 433-451, January.
    4. Tapio, Petri, 2005. "Towards a theory of decoupling: degrees of decoupling in the EU and the case of road traffic in Finland between 1970 and 2001," Transport Policy, Elsevier, vol. 12(2), pages 137-151, March.

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