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Are the Costs of Reducing Greenhouse Gases from Passenger Vehicles Negative?

Ian Parry ()

Discussion Papers from Resources For the Future

Abstract: Energy models suggest that the cost of reducing carbon emissions from the transportation sector is high relative to other sectors, such as electricity generation. However, this paper shows that taxes to reduce passenger vehicle emissions produce large net benefits, rather than costs, when account is taken of (a) their impact on reducing non-carbon externalities from passenger vehicle use, and (b) interactions with the broader fiscal system. Both of these considerations also strengthen the case for using a tax-based approach to reduce emissions over fuel economy regulation, while fiscal considerations strengthen the case for taxes over (non-auctioned) emissions permits.

Keywords: carbon policies; passenger vehicles; externalities; welfare costs (search for similar items in EconPapers)
JEL-codes: Q54 R48 H23 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ene, nep-env and nep-pbe
Date: 2006-12-07
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Journal Article: Are the costs of reducing greenhouse gases from passenger vehicles negative? (2007) Downloads
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