In 2014, the European Union and its members agreed to reduce carbon dioxide emissions by 40 percent before 2030. The Bonus-Malus, a feebate tax scheme, was introduced in Sweden in 2018 in the hopes that it would result in lower carbon dioxide emission from Sweden’s transport sector. Sweden’s feebate is a regulatory measure to achieve an efficient cost-constrained environmental policy, thus reduce the negative externalities from the transport sector. Using a Difference-in-Differences approach, this paper aims to determine who benefits from tax incentives created from the implementation of the feebate tax in Sweden using panel data of list prices and vehicle characteristics between 2015 and 2020. The results indicates that there is no long-run price effect when introducing the Swedish feebate tax. Moreover, the results from the additional analysis indicate that the manufacturers’ list price adjustments to the Swedish feebate tax are overshadowed by the introduction of the EU carbon dioxide emission standards because of the close time proximity between the two policy measures. The lack of list price adjustments enables consumers in Sweden to exploit an arbitrage opportunity in that they can gain the entirety of the subsidy but also suffer the entire cost of the malus fees.
| Identifer | oai:union.ndltd.org:UPSALLA1/oai:DiVA.org:uu-479393 |
| Date | January 2022 |
| Creators | Dagher, Michaela |
| Publisher | Uppsala universitet, Nationalekonomiska institutionen, 9508015840 |
| Source Sets | DiVA Archive at Upsalla University |
| Language | English |
| Detected Language | English |
| Type | Student thesis, info:eu-repo/semantics/bachelorThesis, text |
| Format | application/pdf |
| Rights | info:eu-repo/semantics/openAccess |
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