The effectiveness of policy on consumer choices for private road passenger transport emissions reductions in six major economies

TL;DR

This study analyzes how fiscal policies can influence consumer vehicle choices to reduce emissions across six major economies by examining market structures, consumer behavior, and technological options.

Contribution

It provides a comprehensive dataset and a predictive framework for evaluating policy effectiveness on vehicle emissions reductions considering market diversity.

Findings

Market differences significantly affect policy impact.

Correlations between engine size, emissions, and prices vary by country.

Coverage of unconventional engine technologies is inconsistent.

Abstract

The effectiveness of fiscal policy to influence vehicle purchases for emissions reductions in private passenger road transport depends on its ability to incentivise consumers to make choices oriented towards lower emissions vehicles. However, car purchase choices are known to be strongly socially determined, and this sector is highly diverse due to significant socio-economic differences between consumer groups. Here, we present a comprehensive dataset and analysis of the structure of the 2012 private passenger vehicle fleet-years in six major economies across the World (UK, USA, China, India, Japan and Brazil) in terms of price, engine size and emissions distributions. We argue that choices and aggregate elasticities of substitution can be predicted using this data, enabling to evaluate the effectiveness of potential fiscal and technological change policies on fleet-year emissions reductions. We provide tools to do so based on the distributive structure of prices and emissions in segments of a diverse market, both for conventional as well as unconventional engine technologies. We find that markets differ significantly between nations, and that correlations between engine sizes, emissions and prices exist strongly in some markets and not strongly in others. We furthermore find that markets for unconventional engine technologies have patchy coverages of varying levels. These findings are interpreted in terms of policy strategy.