Globally, the transport sector is the second-largest source of CO2 emissions, with private road transportation accounting for the majority of these emissions. In this study, we use a structural model and a novel dataset of the French new and used car markets to estimate the determinants of private car demand and price sensitivity.
Based on these estimates, we assess the fleet-greening potential of public policies – various feebate designs – and private-sector initiatives – such as introducing a low-end electric vehicle – aimed at making electric vehicles accessible to low- and middle-income households. Our findings demonstrate that targeting low-income households is effective from both distributive and environmental perspectives.
JEL Classification
Keywords: used-car market, car demand, feebate, emissions, policy, France, BLP.
