Transportation Taxes and Energy Transitions: Alternative Policy Designs for
Coherent Identifier 20.500.12592/gvwj2f

Transportation Taxes and Energy Transitions: Alternative Policy Designs for

14 April 2023

Summary

1.1.1 Welfare effects Like most analyses of the external costs of driving and associated welfare effects, our analysis uses a partial equilibrium approach, examining only the effects on parties in the vehicle market, assuming other parts of the economic system remain unchanged (in contrast to a general equilibrium modeling approach that accounts for the effects of a policy on all parts of the econ. [...] The VMT taxes in the B and C scenarios begin in 2025, and the tax rates in the B scenarios are calibrated to raise sufficient revenue from 2025 to 2035 to maintain highway performance. [...] Revenues in the C scenario are roughly four times higher than those in the B scenarios in 2026 (the first year the full VMT tax takes effect), but then they fall to roughly three times the revenues in the B scenarios by 2035, as fewer ICE vehicles pay the pollution portion of the VMT tax (all drivers pay the accident and congestion portions). [...] Under the C scenario, the composition of the vehicle fleet and VMT shift heavily to EVs, but the total amount of VMT across the fleet differs little from that in the A or B scenarios (Figure 6). [...] It could, in theory, be adjusted to account for the weight of the vehicle and the location and time of driving, better reflecting the external costs associated with air pollution, congestion, and accidents.

Pages
41
Published in
United States of America

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