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Steering with prices: fuel and vehicle taxation as market incentives for higher fuel economy.



This paper examines the likely effectiveness of pricing policies as a way to reduce light vehicle fuel consumption in the United States. Fuel pricing policies include higher gasoline taxes, which could be energy or emissions based. Vehicle pricing policies include the Gas Guzzler Tax, other taxes or registration fees based on vehicle consumption rates, and feebates (which would also provide rebates for vehicles of lower than average fuel consumption). Our literature review indicates that the dominant response fo fuel price increases is higher fuel economy, which depends largely on the cost of technology-based improvements to new vehicle fuel economy. The more limited literature on vehicle pricing policies also indicates that technology improvementes are the major component of response. Behavioral changes, such as reduce driving in response to a fuel tax increase and shifted vehicle purchase choices in response to a feebate, are consistently found to be smaller in effect. Generally, the effects of either type of pricing policy are uncertain and ther will be a degree of poor response when fuel economy standards constrain the market to higher average fuel economy than would occur in an unregulated market. However, fuel economy standards provide a greater degree of certainty that desired reductions in fuel consumption will be achieved.. To put the effects in perspective, we examine a hypothetical goal of holding 2010 light vehicle consumption to the 1990 level. Achieving this goal through fuel pricing alone would involve fuel tax increases amounting to a 100-200 percent increase in consumer gasoline price. By contrast, this goal might be achieve with feebates averaging 5-10 percent of vehicle price (although fees and rebates on some vehicles would be larger). Vehicle pricing approaches such as feebates therefore have a grater potencial for succesful control of light vehicle fuel consumption. Nevertheless, uncertainties in response suggest that a regulatory approach will still be needed to achieve reliable reductions in nationwide fuel consumption. Developing a effective and equitable vehicle pricing policy will require active participation by the automarkers, since its effectiveness hinges on how the policy will impact their product development and marketing plans..

Presenta gráfs

Ministerio de Ambiente y Energía. Secretaría de Planificación del Sub-Sector Energía - Centro de Información de Energía y Ambiente, CIENA

Grettel Ruiz Matarrita

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