IDEAS home Printed from https://ideas.repec.org/a/gam/jeners/v6y2013i1p471-491d22921.html
   My bibliography  Save this article

Encouraging Environmentally Friendlier Cars via Fiscal Measures: General Methodology and Application to Belgium

Author

Listed:
  • Laurence Turcksin

    (Department of MOSI-Transport and Logistics, Faculty of Economics, Social and Political Sciences, Vrije Universiteit Brussel, Pleinlaan 2, 1050 Brussels, Belgium)

  • Olivier Mairesse

    (Department of MOSI-Transport and Logistics, Faculty of Economics, Social and Political Sciences, Vrije Universiteit Brussel, Pleinlaan 2, 1050 Brussels, Belgium)

  • Cathy Macharis

    (Department of MOSI-Transport and Logistics, Faculty of Economics, Social and Political Sciences, Vrije Universiteit Brussel, Pleinlaan 2, 1050 Brussels, Belgium)

  • Joeri Van Mierlo

    (Department of MOSI-Transport and Logistics, Faculty of Economics, Social and Political Sciences, Vrije Universiteit Brussel, Pleinlaan 2, 1050 Brussels, Belgium)

Abstract

In this paper, a Belgian tax reform plan is elaborated to respond to the EU proposal that requires member states to restructure passenger car taxation systems, preferentially based on the CO 2 emissions of the car. A tax orientation on CO 2 emissions alone might however favour diesel vehicles, characterised by a higher fuel efficiency, whereas they release more polluting emissions (PM and NO x ) than comparable gasoline vehicles. This paper introduces a methodology, the Ecoscore, as a potential tax assessment basis. The Ecoscore is based on a well-to-wheel framework and enables a comparison of the environmental burden caused by vehicles with different drive trains and using different fuels. A new proposal for a fixed vehicle taxation system, based on the Ecoscore, is launched. In addition, its impact on the life cycle cost of conventional as well as alternative fuelled cars is measured in order to examine its steering effect towards a cleaner vehicle choice. The overall result is that current tax distortions can be corrected by restructuring the vehicle registration tax and annual circulation tax, based on the Ecoscore. To stimulate behavioural changes, such a fiscal policy should however be paired with additional policies that act on the other important aspects that determine the car purchase decision.

Suggested Citation

  • Laurence Turcksin & Olivier Mairesse & Cathy Macharis & Joeri Van Mierlo, 2013. "Encouraging Environmentally Friendlier Cars via Fiscal Measures: General Methodology and Application to Belgium," Energies, MDPI, vol. 6(1), pages 1-21, January.
    • Handle: RePEc:gam:jeners:v:6:y:2013:i:1:p:471-491:d:22921
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1996-1073/6/1/471/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1996-1073/6/1/471/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Liebermann, Yehoshua & Ungar, Meyer, 2002. "Efficiency of consumer intertemporal choice under life cycle cost conditions," Journal of Economic Psychology, Elsevier, vol. 23(6), pages 729-748, December.
    2. De Borger, Bruno, 2001. "Discrete choice models and optimal two-part tariffs in the presence of externalities: optimal taxation of cars," Regional Science and Urban Economics, Elsevier, vol. 31(4), pages 471-504, July.
    3. Mayeres, Inge & Proost, Stef, 2001. "Should diesel cars in Europe be discouraged?," Regional Science and Urban Economics, Elsevier, vol. 31(4), pages 453-470, July.
    4. Goedecke, Martin & Therdthianwong, Supaporn & Gheewala, Shabbir H., 2007. "Life cycle cost analysis of alternative vehicles and fuels in Thailand," Energy Policy, Elsevier, vol. 35(6), pages 3236-3246, June.
    5. Kunert, Uwe & Kuhfeld, Hartmut, 2007. "The diverse structures of passenger car taxation in Europe and the EU Commissions proposal for reform," Transport Policy, Elsevier, vol. 14(4), pages 306-316, July.
    6. Werber, Mathew & Fischer, Michael & Schwartz, Peter V., 2009. "Batteries: Lower cost than gasoline?," Energy Policy, Elsevier, vol. 37(7), pages 2465-2468, July.
    7. Greene, David L., 2011. "Uncertainty, loss aversion, and markets for energy efficiency," Energy Economics, Elsevier, vol. 33(4), pages 608-616, July.
    8. Turrentine, Thomas S. & Kurani, Kenneth S., 2007. "Car buyers and fuel economy?," Energy Policy, Elsevier, vol. 35(2), pages 1213-1223, February.
    9. Santos, Georgina & Behrendt, Hannah & Maconi, Laura & Shirvani, Tara & Teytelboym, Alexander, 2010. "Part I: Externalities and economic policies in road transport," Research in Transportation Economics, Elsevier, vol. 28(1), pages 2-45.
    10. Innes, Robert, 1996. "Regulating Automobile Pollution under Certainty, Competition, and Imperfect Information," Journal of Environmental Economics and Management, Elsevier, vol. 31(2), pages 219-239, September.
    11. Turrentine, Tom & Kurani, Kenneth S, 2007. "Car buyers and fuel economy?," Institute of Transportation Studies, Working Paper Series qt56x845v4, Institute of Transportation Studies, UC Davis.
    12. Johnstone, N. & Karousakis, K., 1999. "Economic incentives to reduce pollution from road transport: the case for vehicle characteristics taxes," Transport Policy, Elsevier, vol. 6(2), pages 99-108, April.
    13. 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.
    14. Greene, David L. & Patterson, Philip D. & Singh, Margaret & Li, Jia, 2005. "Corrigendum to "Feebates, rebates and gas-guzzler taxes: a study of incentives for increased fuel economy" [Energy Policy 33 (2005) 757-775]," Energy Policy, Elsevier, vol. 33(14), pages 1901-1902, September.
    15. de Haan, Peter & Mueller, Michel G. & Scholz, Roland W., 2009. "How much do incentives affect car purchase? Agent-based microsimulation of consumer choice of new cars--Part II: Forecasting effects of feebates based on energy-efficiency," Energy Policy, Elsevier, vol. 37(3), pages 1083-1094, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mingxiong Bi & Chencheng Wang & Dian Fu & Xun Tan & Shurong Yu & Junbai Pan & Kun Lv, 2022. "Chinese-Style Fiscal Decentralization, Ecological Attention of Government, and Regional Energy Intensity," Energies, MDPI, vol. 15(22), pages 1-28, November.
    2. Tang, Tianwei & Jiang, Xiaojing & Zhu, Kaiwen & Ying, Ziyao & Liu, Wenyu, 2024. "Effects of the promotion pressure of officials on green low-carbon transition: Evidence from 277 cities in China," Energy Economics, Elsevier, vol. 129(C).
    3. Antonio Colmenar-Santos & Carlos De Palacio & David Borge-Diez & Oscar Monzón-Alejandro, 2014. "Planning Minimum Interurban Fast Charging Infrastructure for Electric Vehicles: Methodology and Application to Spain," Energies, MDPI, vol. 7(3), pages 1-23, February.
    4. Moayad Shammut & Mengqiu Cao & Yuerong Zhang & Claire Papaix & Yuqi Liu & Xing Gao, 2019. "Banning Diesel Vehicles in London: Is 2040 Too Late?," Energies, MDPI, vol. 12(18), pages 1-17, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bastin, Cristina & Szklo, Alexandre & Rosa, Luiz Pinguelli, 2010. "Diffusion of new automotive technologies for improving energy efficiency in Brazil's light vehicle fleet," Energy Policy, Elsevier, vol. 38(7), pages 3586-3597, July.
    2. Santos, Georgina & Behrendt, Hannah & Maconi, Laura & Shirvani, Tara & Teytelboym, Alexander, 2010. "Part I: Externalities and economic policies in road transport," Research in Transportation Economics, Elsevier, vol. 28(1), pages 2-45.
    3. Fridstrøm, Lasse & Østli, Vegard, 2017. "The vehicle purchase tax as a climate policy instrument," Transportation Research Part A: Policy and Practice, Elsevier, vol. 96(C), pages 168-189.
    4. Sprei, Frances & Karlsson, Sten, 2013. "Energy efficiency versus gains in consumer amenities—An example from new cars sold in Sweden," Energy Policy, Elsevier, vol. 53(C), pages 490-499.
    5. Martin, Elliott William, 2009. "New Vehicle Choice, Fuel Economy and Vehicle Incentives: An Analysis of Hybrid Tax Credits and the Gasoline Tax," University of California Transportation Center, Working Papers qt5gd206wv, University of California Transportation Center.
    6. Martin, Elliot William, 2009. "New Vehicle Choices, Fuel Economy and Vehicle Incentives: An Analysis of Hybrid Tax Credits and Gasoline Tax," University of California Transportation Center, Working Papers qt6sz198c2, University of California Transportation Center.
    7. 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.
    8. James M. Sallee, 2011. "The Taxation of Fuel Economy," Tax Policy and the Economy, University of Chicago Press, vol. 25(1), pages 1-38.
    9. Brand, Christian & Anable, Jillian & Tran, Martino, 2013. "Accelerating the transformation to a low carbon passenger transport system: The role of car purchase taxes, feebates, road taxes and scrappage incentives in the UK," Transportation Research Part A: Policy and Practice, Elsevier, vol. 49(C), pages 132-148.
    10. Mahlia, T.M.I. & Tohno, S. & Tezuka, T., 2013. "International experience on incentive program in support of fuel economy standards and labelling for motor vehicle: A comprehensive review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 25(C), pages 18-33.
    11. Kenneth Gillingham & Karen Palmer, 2014. "Bridging the Energy Efficiency Gap: Policy Insights from Economic Theory and Empirical Evidence," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 8(1), pages 18-38, January.
    12. Malina, Christiane, 2016. "The environmental impact of vehicle circulation tax reform in Germany," CAWM Discussion Papers 86, University of Münster, Münster Center for Economic Policy (MEP).
    13. Gallagher, Kelly Sims & Muehlegger, Erich, 2011. "Giving green to get green? Incentives and consumer adoption of hybrid vehicle technology," Journal of Environmental Economics and Management, Elsevier, vol. 61(1), pages 1-15, January.
    14. Clerides, Sofronis & Zachariadis, Theodoros, 2008. "The effect of standards and fuel prices on automobile fuel economy: An international analysis," Energy Economics, Elsevier, vol. 30(5), pages 2657-2672, September.
    15. Santos, Georgina & Rembalski, Sebastian, 2021. "Do electric vehicles need subsidies in the UK?," Energy Policy, Elsevier, vol. 149(C).
    16. Chen, Anning, 2011. "Reliable GPS Integer Ambiguity Resolution," University of California Transportation Center, Working Papers qt9gs0t2f9, University of California Transportation Center.
    17. Greene, David L., 2011. "Uncertainty, loss aversion, and markets for energy efficiency," Energy Economics, Elsevier, vol. 33(4), pages 608-616, July.
    18. Sierzchula, William & Bakker, Sjoerd & Maat, Kees & van Wee, Bert, 2014. "The influence of financial incentives and other socio-economic factors on electric vehicle adoption," Energy Policy, Elsevier, vol. 68(C), pages 183-194.
    19. Martin, Elliot & Shaheen, Susan & Lipman, Timothy & Camel, Madonna, 2014. "Evaluating the public perception of a feebate policy in California through the estimation and cross-validation of an ordinal regression model," Transport Policy, Elsevier, vol. 33(C), pages 144-153.
    20. Bénédicte Meurisse, 2015. "On the relevance of differentiated car purchase taxes in light of the rebound effect," Working Papers 1512, Chaire Economie du climat.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jeners:v:6:y:2013:i:1:p:471-491:d:22921. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.