Distributional effects of fiscal instruments for climate policy in transport

  • Project Duration: 06/2022 - 10/2023

How taxes, levies and subsidies for the transport transformation can be designed socially just

Policymakers must realign taxes, levies and subsidies related to passenger cars so that the German transport sector can make its contribution to achieving climate targets. The key elements of a portfolio of instruments that is effective in terms of climate protection and that is economically efficient are an ambitious carbon price path for fuels, a vehicle taxation that sets a potent CO2 price signal based on first registration, and a reformed company car taxation that is environmentally orientated.

At the same time, climate protection measures must be socially balanced in order to increase acceptance. One prerequisite is that taxes and the use of funds are designed in such a way that they relieve economically vulnerable households. Households with low or medium income should participate in the transport transition at an early stage and, in particular, be given the opportunity to switch to efficient, climate-friendly technologies.

By quantitatively modelling the distributional effects of central fiscal instruments, this project aims to identify ways in which a strong steering effect towards lower greenhouse gas emissions in the transport sector can be designed in a socially balanced manner.

Project management

Benjamin Fischer

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