Encouraging Environmentally Friendlier Cars via Fiscal Measures: General Methodology and Application to Belgium

Laurence Turcksin, Olivier Mairesse, Cathy Macharis and Joeri Van Mierlo
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Laurence Turcksin: Department of MOSI-Transport and Logistics, Faculty of Economics, Social and Political Sciences, Vrije Universiteit Brussel, Pleinlaan 2, 1050 Brussels, Belgium
Olivier Mairesse: Department of MOSI-Transport and Logistics, Faculty of Economics, Social and Political Sciences, Vrije Universiteit Brussel, Pleinlaan 2, 1050 Brussels, Belgium
Cathy Macharis: Department of MOSI-Transport and Logistics, Faculty of Economics, Social and Political Sciences, Vrije Universiteit Brussel, Pleinlaan 2, 1050 Brussels, Belgium
Joeri Van Mierlo: Department of MOSI-Transport and Logistics, Faculty of Economics, Social and Political Sciences, Vrije Universiteit Brussel, Pleinlaan 2, 1050 Brussels, Belgium

Energies, 2013, vol. 6, issue 1, 1-21

Abstract: In this paper, a Belgian tax reform plan is elaborated to respond to the EU proposal that requires member states to restructure passenger car taxation systems, preferentially based on the CO 2 emissions of the car. A tax orientation on CO 2 emissions alone might however favour diesel vehicles, characterised by a higher fuel efficiency, whereas they release more polluting emissions (PM and NO x ) than comparable gasoline vehicles. This paper introduces a methodology, the Ecoscore, as a potential tax assessment basis. The Ecoscore is based on a well-to-wheel framework and enables a comparison of the environmental burden caused by vehicles with different drive trains and using different fuels. A new proposal for a fixed vehicle taxation system, based on the Ecoscore, is launched. In addition, its impact on the life cycle cost of conventional as well as alternative fuelled cars is measured in order to examine its steering effect towards a cleaner vehicle choice. The overall result is that current tax distortions can be corrected by restructuring the vehicle registration tax and annual circulation tax, based on the Ecoscore. To stimulate behavioural changes, such a fiscal policy should however be paired with additional policies that act on the other important aspects that determine the car purchase decision.

Keywords: annual circulation tax; Ecoscore; life cycle cost analysis; tax reform; vehicle registration tax (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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