Energy Policies for Passenger Motor Vehicles

Kenneth Small ()
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Kenneth Small: Department of Economics, University of California-Irvine

No 101108, Working Papers from University of California-Irvine, Department of Economics

Abstract: This paper assesses the costs and effectiveness of several energy policies for light-duty motor vehicles in the United States, using the National Energy Modeling System (NEMS). The policies addressed are higher fuel taxes, tighter vehicle efficiency standards, and financial subsidies and penalties for the purchase of high- and low-efficiency vehicles (feebates). I find that tightening fuel-efficiency standards beyond those currently mandated through 2016, or imposing feebates designed to accomplish similar changes, can achieve by 2030 reductions in energy use by all light-duty passenger vehicles of 7.1 to 8.4 percent. A stronger feebate policy has somewhat greater effects, but at a significantly higher unit cost. High fuel taxes, on the order of $2.00 per gallon (2007$), have somewhat greater effects, arguably more favorable cost-effectiveness ratios, and produce their effects much more quickly because they affect the usage rate of both new and used vehicles. Policy costs vary greatly with assumptions about the reason for the apparent myopia commonly observed in consumer demand for fuel efficiency, and with the inclusion or exclusion of ancillary costs of congestion, local air pollution, and accidents.

Keywords: Fuel efficiency; Light-duty vehicles; Energy policy; Greenhouse gases; Feebate; Fuel tax (search for similar items in EconPapers)
JEL-codes: L92 Q48 Q52 Q54 R48 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2011-05
New Economics Papers: this item is included in nep-ene, nep-env, nep-reg and nep-ure
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https://www.economics.uci.edu/files/docs/workingpapers/2010-11/small-8.pdf (application/pdf)

Related works:
Journal Article: Energy policies for passenger motor vehicles (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:irv:wpaper:101108

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