Healthy Climate, Healthy Bodies: Optimal Fuel Taxation and Physical Activity

Inge van den Bijgaart, David Klenert, Linus Mattauch and Simona Sulikova

No 8762, CESifo Working Paper Series from CESifo

Abstract: Transport has significant externalities including carbon emissions and air pollution. Public health research has identified additional social gains from active travel, due to health benefits of physical exercise. Per mile, these benefits greatly exceed the external costs from car use. We introduce active travel into an optimal fuel taxation model and analytically characterise the optimal second-best fuel tax. We find that accounting for active travel benefits increases the optimal fuel tax by 49% in the US and 36% in the UK. Fuel taxes should be implemented jointly with other policies aimed at increasing the uptake of active travel.

Keywords: transport externalities; congestion; active travel; fuel; health behaviour; optimal taxation (search for similar items in EconPapers)
JEL-codes: H23 I12 Q53 Q54 Q58 R41 R48 Z28 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-ene, nep-env, nep-hea, nep-pub and nep-tre
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Related works:
Journal Article: Healthy climate, healthy bodies: Optimal fuel taxation and physical activity (2024)
Working Paper: Healty Climate, Healthy Bodies -- Optimal Fuel Taxation and Physical Activity (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_8762

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