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There is a debate among policy analysts about whether fuel taxes alone are the most effective policy to reduce fuel use by motorists, or whether to also use mandatory standards for fuel efficiency. A problem with a policy mandating fuel economy standards is the"rebound effect,"whereby owners with more efficient vehicles increase vehicle usage. If an important part of negative externalities from transport are associated with vehicle kilometers (accidents, congestion, road wear) rather than fuel consumption, the rebound effect increases negative externalities. Taxes and standards should be mutually supportive because fuel taxes often meet political resistance. Over time, fuel efficiency standards can reduce political resistance to fuel taxes. Thus, by raising fuel efficiency standards now, politicians may be able to pursue higher fuel tax paths in the future. Another argument in support of fuel efficiency standards and similar policies is that standards to a greater extent than taxes can be announced in advance and still be credible and change the behavior of inventors, firms, and other agents in society. A further argument is that standards can be used with greater force and commitment through international coordination. | There is a debate among policy analysts about whether fuel taxes alone are the most effective policy to reduce fuel use by motorists, or whether to also use mandatory standards for fuel efficiency. A problem with a policy mandating fuel economy standards is the"rebound effect,"whereby owners with more efficient vehicles increase vehicle usage. If an important part of negative externalities from transport are associated with vehicle kilometers (accidents, congestion, road wear) rather than fuel consumption, the rebound effect increases negative externalities. Taxes and standards should be mutually supportive because fuel taxes often meet political resistance. Over time, fuel efficiency standards can reduce political resistance to fuel taxes. Thus, by raising fuel efficiency standards now, politicians may be able to pursue higher fuel tax paths in the future. Another argument in support of fuel efficiency standards and similar policies is that standards to a greater extent than taxes can be announced in advance and still be credible and change the behavior of inventors, firms, and other agents in society. A further argument is that standards can be used with greater force and commitment through international coordination. | ||
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The different versions of the original document can be found in: | The different versions of the original document can be found in: | ||
| − | * [http://dx.doi.org/10.1596/1813-9450-4695 http://dx.doi.org/10.1596/1813-9450-4695] | + | * [http://dx.doi.org/10.1596/1813-9450-4695 http://dx.doi.org/10.1596/1813-9450-4695] under the license https://creativecommons.org/licenses/by |
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| + | * [http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2008/08/19/000158349_20080819140748/Rendered/PDF/WPS4695.pdf http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2008/08/19/000158349_20080819140748/Rendered/PDF/WPS4695.pdf] | ||
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| + | * [https://openknowledge.worldbank.org/bitstream/10986/6793/1/WPS4695.pdf https://openknowledge.worldbank.org/bitstream/10986/6793/1/WPS4695.pdf] | ||
| − | * [ | + | * [https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1240229 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1240229], |
| + | : [https://openknowledge.worldbank.org/handle/10986/6793 https://openknowledge.worldbank.org/handle/10986/6793], | ||
| + | : [https://ideas.repec.org/p/wbk/wbrwps/4695.html https://ideas.repec.org/p/wbk/wbrwps/4695.html], | ||
| + | : [http://documents.worldbank.org/curated/en/706211468137702509/Transportation-fuel-use-technology-and-standards-The-role-of-credibility-and-expectations http://documents.worldbank.org/curated/en/706211468137702509/Transportation-fuel-use-technology-and-standards-The-role-of-credibility-and-expectations], | ||
| + | : [https://papers.ssrn.com/sol3/Delivery.cfm/4695.pdf?abstractid=1240229&mirid=1 https://papers.ssrn.com/sol3/Delivery.cfm/4695.pdf?abstractid=1240229&mirid=1], | ||
| + | : [https://elibrary.worldbank.org/doi/book/10.1596/1813-9450-4695 https://elibrary.worldbank.org/doi/book/10.1596/1813-9450-4695], | ||
| + | : [https://econpapers.repec.org/RePEc:wbk:wbrwps:4695 https://econpapers.repec.org/RePEc:wbk:wbrwps:4695], | ||
| + | : [https://academic.microsoft.com/#/detail/1846590070 https://academic.microsoft.com/#/detail/1846590070] under the license cc-by | ||
Latest revision as of 15:25, 21 January 2021
Abstract
There is a debate among policy analysts about whether fuel taxes alone are the most effective policy to reduce fuel use by motorists, or whether to also use mandatory standards for fuel efficiency. A problem with a policy mandating fuel economy standards is the"rebound effect,"whereby owners with more efficient vehicles increase vehicle usage. If an important part of negative externalities from transport are associated with vehicle kilometers (accidents, congestion, road wear) rather than fuel consumption, the rebound effect increases negative externalities. Taxes and standards should be mutually supportive because fuel taxes often meet political resistance. Over time, fuel efficiency standards can reduce political resistance to fuel taxes. Thus, by raising fuel efficiency standards now, politicians may be able to pursue higher fuel tax paths in the future. Another argument in support of fuel efficiency standards and similar policies is that standards to a greater extent than taxes can be announced in advance and still be credible and change the behavior of inventors, firms, and other agents in society. A further argument is that standards can be used with greater force and commitment through international coordination.
Original document
The different versions of the original document can be found in:
- https://openknowledge.worldbank.org/handle/10986/6793,
- https://ideas.repec.org/p/wbk/wbrwps/4695.html,
- http://documents.worldbank.org/curated/en/706211468137702509/Transportation-fuel-use-technology-and-standards-The-role-of-credibility-and-expectations,
- https://papers.ssrn.com/sol3/Delivery.cfm/4695.pdf?abstractid=1240229&mirid=1,
- https://elibrary.worldbank.org/doi/book/10.1596/1813-9450-4695,
- https://econpapers.repec.org/RePEc:wbk:wbrwps:4695,
- https://academic.microsoft.com/#/detail/1846590070 under the license cc-by
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Document information
Published on 01/01/2008
Volume 2008, 2008
DOI: 10.1596/1813-9450-4695
Licence: CC BY-NC-SA license
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Keywords
Economics • Externality • Fuel efficiency • Fuel tax • Marginal cost • Microeconomics • Public economics • Rebound effect • Rebound effect (conservation) • Sustainable transport • Tax rate • Transport Economics Policy&Planning,Transport and Environment,Environmental Economics&Policies,Energy Production and Transportation,Oil Refining&Gas Industry
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