The Novel Vehicle Tax on Fine Particulate Matter Emissions

Nico Lukas Kasparetz ()

CRC TR 224 Discussion Paper Series from University of Bonn and University of Mannheim, Germany

Abstract: Old diesel cars without modern emissions control technology substantially contribute to air pollution by emitting high amounts of fine particulate matter, which is known to be detrimental to human health. Periodic vehicle registration fees offer a potentially powerful lever to speed up the retirement of old and polluting vehicles, yet little empirical evidence exists on the matter. This paper analyzes how higher registration fees for old and polluting diesel vehicles in the Netherlands accelerate their outflow from the vehicle fleet. It leverages the staggered rollout of diesel particulate filters as factory-fitted equipment to create quasi-random variation in pollution levels across otherwise comparable diesel car models. By applying Synthetic Difference-in-Differences complemented with a hazard model, this paper establishes that the tax increase on old and polluting cars is effective at reducing their numbers, albeit at the cost of being a very regressive policy.

Keywords: Vehicle Retirement; Particulate Matter Emissions; Vehicle Registration Fee; Difference-in-Differences; Survival Analysis; Policy evaluation; The Netherlands; Vehicle Taxes; Externalities; Redistributive Effects; Environmental Taxes and Subsidies (search for similar items in EconPapers)
JEL-codes: H23 L62 Q52 R48 (search for similar items in EconPapers)
Pages: 96
Date: 2025-12
New Economics Papers: this item is included in nep-ene, nep-env, nep-inv, nep-pub and nep-tre
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