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ECN publication
Differentiated sales and vehicle taxes: an assessment of instruments for the internalisation of external costs oftransport
Published by: Publication date:
ECN Policy Studies 1995
ECN report number: Document type:
ECN-C--95-091 ECN publication
Number of pages: Full text:
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The level of differentiation of the sales and annual vehicle taxes isbased on the avoidance costs of noise and air pollution caused by transportation. The assessment is made on economic, ecological, technical and political criteria. The basic assumption of this report is that a system of differentiated sales and annual vehicle taxes for passenger cars will be an additional instrument to an energy/CO2 tax (or levy). The reason is that due to the far reaching characteristics, the incentives for innovation and the fact that fuel taxes are relatively easy to implement, the core of any internalization strategy at an international level should consist of a taxation on fuel. In this report the discussion of instruments is at the European Community level. On the base of this preliminary research it can be concluded that differentiated sales and annual vehicle taxes have no strong negative impacts, but also have not many strong positive impacts. The instruments will not lead to strong positive impacts on the environment. One of the reasons is that both tax systems are related to vehicle ownership and not to vehicle use. There is a stronger relationship between vehicle use and emissions than between vehicle ownership and emissions. However, the instruments probably are technically as well as politically feasible and will give an incentive for the development and sale of cleaner and more quiet vehicles within the European Union. 1 figs., 9 tabs., 22 refs.

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