Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/276238 
Authors: 
Year of Publication: 
2023
Series/Report no.: 
ZEW Discussion Papers No. 23-033
Publisher: 
ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung, Mannheim
Abstract: 
I study the impact of subsidies for Plug-in hybrid vehicles (PHEV) on carbon emissions. I show that subsidizing innovations without considering consumer behavior can harm the environment. I provide descriptive evidence on charging instances of PHEV and combine it with a structural model of demand for new passenger vehicles to evaluate the market outcomes had subsidies for PHEV not been in place. I show that PHEV subsidies were used by consumers to purchase larger and heavier vehicles and that consumers of PHEV seldom charge their vehicle. Taking into account the observed consumer behavior, I find that the elimination of subsidies for PHEV would have led to a yearly reduction of 167,139 tons of carbon emissions which are equivalent to the yearly carbon emissions 52,916 households emit due to energy consumption.
Subjects: 
Environmental regulation
Substitution
Carbon emissions
Automobiles
Demand estimation
JEL: 
D12
H23
H71
Q48
Q58
Document Type: 
Working Paper

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