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Reforming EU car labels: How to achieve consumer-friendly transparency?

Author

Listed:
  • Badenhoop, Nikolai
  • Riedel, Max

Abstract

We examine the EU car labelling regime for CO2 emissions and fuel efficiency under Directive 1999/94/EC and document strongly diverging national labelling methodologies. Our contribution is fourfold. First, we distil the most relevant economic and behavioural research findings on car labelling. Labels effectively help consumers make informed decisions if they are well-designed, comprehensible, and informative about hidden costs. Second, we compare the national car labelling methodologies and find stark inconsistencies, undermining the EU's effort to decarbonise the car sector. Empirically, we find heterogeneous distributions of the national labels if applied to the national and EU car fleets. Third, we assess the EU energy efficiency labelling regime for electric appliances under Regulation (EU) 2017/1369 as a labelling role model. Finally, we propose a standardised EU car label with comparative information in two distinct coloured scales using absolute labelling thresholds for CO2 emissions and fuel or energy efficiency.

Suggested Citation

  • Badenhoop, Nikolai & Riedel, Max, 2024. "Reforming EU car labels: How to achieve consumer-friendly transparency?," SAFE Working Paper Series 433, Leibniz Institute for Financial Research SAFE.
    • Handle: RePEc:zbw:safewp:305283
    DOI: 10.2139/ssrn.4994192
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    References listed on IDEAS

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    1. Vincenzina Caputo & Achilleas Vassilopoulos & Rodolfo M. Nayga Jr. & Maurizio Canavari, 2013. "Welfare Effects of Food Miles Labels," Journal of Consumer Affairs, Wiley Blackwell, vol. 47(2), pages 311-327, July.
    2. Martin Weiss & Trey Winbush & Alexandra Newman & Eckard Helmers, 2024. "Energy Consumption of Electric Vehicles in Europe," Sustainability, MDPI, vol. 16(17), pages 1-26, August.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Car labels; CO2 emissions; Energy efficiency; Fuel economy; Directive 1999/94/EC; Passenger cars; Sustainable transport;
    All these keywords.

    JEL classification:

    • R4 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics
    • K30 - Law and Economics - - Other Substantive Areas of Law - - - General
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation
    • L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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