Effectiveness of fiscal and other measures to manage greenhouse gas emissions from the automobile sector : evidence from Europe

This paper models annual new car average CO2 emissions intensity in EU Member States over the period 1995-2004. It attempts to explore the relationship, if any, between national vehicle and fuel taxes and the EU voluntary agreement in reducing CO2 emissions from the passenger car fleet. Our results indicate that (i) vehicle taxes are likely to be significant in reducing CO2 emissions intensity of passenger cars, and that (ii) the CO2 emissions intensity of EU new passenger cars has fallen over the time period studied. We hypothesise that this time trend may be attributable to the voluntary agreement.