The German eco tax and its impact on CO2 emissions

Petrik Runst and David Höhle

Energy Policy, 2022, vol. 160, issue C

Abstract: Many countries have only recently introduced carbon taxation to reduce emissions and the time series data for evaluating these policies is not available yet. We use the introduction of fossil taxes in the German transportation sector to evaluate the effectiveness of environmental taxation. We employ synthetic control methods in the quantitative section of our analysis. The results indicate that the carbon price increase by about 66 €/t CO2 led to a considerable decline of transport emissions by 0.2–0.35 t per person and year. We also show that the sales share of diesel cars quickly increases after the reform, whereas the fuel efficiency of non-diesel cars increases with a three-year time lag. Most importantly, a qualitative analysis of a German car manufacturer's business reports also suggests that the tax triggered an improvement in engine technology.

Keywords: Carbon taxation; Transport sector; Carbon emissions (search for similar items in EconPapers)
JEL-codes: H23 Q48 R48 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:160:y:2022:i:c:s0301421521005206

DOI: 10.1016/j.enpol.2021.112655

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