Article

To Rebate or Not to Rebate: Fuel Economy Standards vs. Feebates?

Isis Durrmeyer et Mario Samano

Résumé

We compare the welfare effects in equilibrium of two environmental regulations that aim at increasing the new cars fleet’s average fuel efficiency: the fuel economy standards and the feebate policies. Maintaining the same environmental benefit and tax revenue, we simulate the implementation of each policy in France and the United States. Standard-type policies have larger negative welfare effects, up to 3.2 times those from the feebate. Effects on manufacturers are heterogeneous: some are better of under the standard regulation. The addition of a market to trade levels of fuel efficiency dominates the simple standard regulation but not always the feebate. We also consider the attribute-based standard, technological improvements, and the equivalence with fuel taxes as extensions.

Mots-clés

Environmental regulation; automobile market; structural model; policy simulations;

Codes JEL

  • C51: Model Construction and Estimation
  • L50: General
  • Q51: Valuation of Environmental Effects

Remplace

Isis Durrmeyer et Mario Samano, « To Rebate or Not to Rebate: Fuel Economy Standards vs. Feebates? », TSE Working Paper, n° 16-732, novembre 2016, révision mai 2017.

Référence

Isis Durrmeyer et Mario Samano, « To Rebate or Not to Rebate: Fuel Economy Standards vs. Feebates? », The Economic Journal, vol. 128, n° 616, décembre 2018, p. 3076–3116.

Publié dans

The Economic Journal, vol. 128, n° 616, décembre 2018, p. 3076–3116