A Study Of A Feebate Policy Aimed At Vehicle Manufacturers To Reduce CO2 Emissions

Abstract

As part of environmental fiscal reform, the South African government introduced a vehicle emission tax during 2010. However, the design of this tax focuses on consumers and might not be as effective in reducing CO₂ emissions. A feebate policy is considered as a possible alternative to reduce CO₂ emissions. A literature review was performed on the topic of feebate policies that could encourage vehicle manufacturers to invest in energy-efficient technology aimed at reducing CO₂ emissions. Based on the literature review a questionnaire was developed and distributed to nine vehicle manufacturers in South Africa. The study specifically focused on vehicle manufacturers as they have the opportunity to design, develop and introduce energy-efficient technology that could reduce CO₂ emissions. Results suggest that a feebate policy (that leads to cost savings) is an alternative that could be considered to encourage vehicle manufacturers to invest in energy-efficient technology in order to reduce CO₂ emissions.