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Title:CO2 mitigation in road transport: Gasoline taxation and/or fuel-efficiency regulation? PDF Logo
Authors:Pethig, Rüdiger
Issue Date:2009
Series/Report no.:Volkswirtschaftliche Diskussionsbeiträge // Universität Siegen, Fachbereich Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht 133
Abstract:Although gasoline taxes are widely used (nearly) efficient CO2 emission controls, additional fuel-efficiency regulation is applied e.g. in the USA and in Europe. In a simple analytical model, we specify the welfare implications of (i) gasoline taxes, (ii) of 'gas-guzzler taxes' (iii) of fuel-efficiency standards, and of combinations of the above. Both forms (ii) and (iii) of fuel-efficiency regulation turn out to produce the same suboptimally low emission rates. Combining (i) and (ii) is also distortionary, while efficiency can be secured by combining (i) and (iii). However, in the optimal mix of the latter two instruments the fuel-efficiency standard is redundant.
Subjects:CO2 emissions
road transport
fuel efficiency regulation
gasoline tax
JEL:D61
H21
H22
Q52
Q53
Q58
Document Type:Working Paper
Appears in Collections:Volkswirtschaftliche Diskussionsbeiträge, Universität Siegen

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