Trade-offs in CO2-oriented vehicle tax reforms: A case study of Greece |
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| Authors: | Adamos Adamou Sofronis Clerides Theodoros Zachariadis |
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| Institution: | 1. Department of Soil & Environment, Swedish University of Agricultural Sciences, Box 7014, 75007 Uppsala, Sweden;2. Department of Ecology, Swedish University of Agricultural Sciences, Box 7044, 75007 Uppsala, Sweden;3. Department of Economics, Swedish University of Agricultural Sciences, Box 7013, 75007 Uppsala, Sweden;4. Department of Social Sciences, Södertörn University, 14189 Huddinge, Sweden;5. Department of Environmental Sciences, Aarhus University, 4000 Roskilde, Denmark;6. Department of Agroecology & Environment, Agroscope, Reckenholzstrasse 191, 8046 Zürich, Switzerland |
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| Abstract: | We estimate demand for automobiles in Greece using a model of product differentiation and use the model to evaluate carbon-based tax schemes that could shift consumer purchases towards low CO2 emission cars. We find that careful policy design, supported by appropriate modeling, can bring about substantial environmental benefits without losing control of economic parameters such as public finances or firm profits. This contrasts to the results of recent vehicle tax reforms in European countries, which turned out to be more costly than initially expected. |
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