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Fuel taxation, emissions policy, and competitive advantage in the diffusion of European diesel automobiles

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  • Eugenio J. Miravete
  • María J. Moral
  • Jeff Thurk

Abstract

Economic integration agreements have significantly decreased import tariffs. We investigate whether national policies can be an effective replacement for tariffs to protect domestic industry. We show that (a) European fuel taxes and vehicle emissions policy favored diesel vehicles, a technology popular with European consumers but largely offered only by domestic automakers; (b) European automakers benefited from pro‐diesel fuel taxes and a lenient NOx emissions policy to earn significant profits from diesel cars; and (c) that both policies amounted to significant nontariff trade policies equivalent to an import tariff between two to three times the official rate.

Suggested Citation

  • Eugenio J. Miravete & María J. Moral & Jeff Thurk, 2018. "Fuel taxation, emissions policy, and competitive advantage in the diffusion of European diesel automobiles," RAND Journal of Economics, RAND Corporation, vol. 49(3), pages 504-540, September.
    • Handle: RePEc:bla:randje:v:49:y:2018:i:3:p:504-540
    DOI: 10.1111/1756-2171.12243
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    Cited by:

    1. Nirupam Mukhopadhyay & Narayan Chandra Nayak, 2024. "Catalyzing change: a cross-country perspective on diffusion patterns of green innovation," Environment Systems and Decisions, Springer, vol. 44(4), pages 853-871, December.
    2. Polina Ustyuzhanina, 2022. "Decomposition of air pollution emissions from Swedish manufacturing," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 24(2), pages 195-223, April.
    3. Hasan, Iftekhar & Noth, Felix & Tonzer, Lena, 2019. "Thou shalt not bear false witness against your customers: Cultural norms and the Volkswagen scandal," IWH Discussion Papers 21/2019, Halle Institute for Economic Research (IWH).
    4. Donna, Javier D., 2018. "Measuring Long-Run Price Elasticities in Urban Travel Demand," MPRA Paper 90059, University Library of Munich, Germany.
    5. Javier D. Donna, 2021. "Measuring long‐run gasoline price elasticities in urban travel demand," RAND Journal of Economics, RAND Corporation, vol. 52(4), pages 945-994, December.
    6. Hasan, Iftekhar & Noth, Felix & Tonzer, Lena, 2023. "Cultural norms and corporate fraud: Evidence from the Volkswagen scandal," Journal of Corporate Finance, Elsevier, vol. 82(C).
    7. Amit Gandhi & Jean-François Houde, 2019. "Measuring Substitution Patterns in Differentiated-Products Industries," NBER Working Papers 26375, National Bureau of Economic Research, Inc.
    8. Heid, Pascal & Remmy, Kevin & Reynaert, Mathias, 2024. "Equilibrium Effects in Complementary Markets: Electric Vehicle Adoption and Electricity Pricing," TSE Working Papers 24-1589, Toulouse School of Economics (TSE).
    9. Taiju Kitano, 2022. "Environmental Policy as a De Facto Industrial Policy: Evidence from the Japanese Car Market," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 60(4), pages 511-548, June.
    10. Laborda, Juan & Moral, María J., 2019. "Scrappage by age: Cash for Clunkers matters!," Transportation Research Part A: Policy and Practice, Elsevier, vol. 124(C), pages 488-504.
    11. David Leuwer & Bernd Süssmuth, 2018. "Assessing Temporary Product-Specific Subsidies: A Time Series Intervention Analysis," CESifo Working Paper Series 6946, CESifo.
    12. González, Xulia & Moral, María J., 2019. "Effects of antitrust prosecution on retail fuel prices," International Journal of Industrial Organization, Elsevier, vol. 67(C).
    13. Gustavo A. Marrero & Jesús Rodríguez-López & Rosa Marina González, 2020. "Car usage, $${\text {CO}}_{2}$$CO2 emissions and fuel taxes in Europe," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 11(2), pages 203-241, June.

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