An increasing number of countries have implemented or are evaluating feebate systems in order to reduce energy consumption of new
vehicle registrations. We distinguish between absolute feebates based strictly on a vehicle’s energy consumption and relative feebates
normalizing energy consumption by a given car utility. This paper analyzes whether absolute or relative feebates encourage more
consumers to change to vehicles with lower energy consumption. We combine an analysis of all car models on sale at the end of 2005 with
survey data from 326 potential new car buyers. Analysis of the car fleet with regard to behavioral changes assumed as realistic shows that
relative systems succeed better in offering more consumer groups cars that are eligible for incentives. Survey results suggest that
consumers show some, but limited, willingness to change behavior to obtain an incentive. However, a relative system potentially allows
people to switch to cars with higher relative efficiency without actually lowering absolute CO2 emissions. We discuss this inherent
dilemma of simultaneously addressing more consumers and limiting counteracting effects. In order to find the optimal trade-off, we
suggest assessing different parameters operationalizing vehicle utility by means of micro-simulation with detailed car fleet and
differentiated consumer segments.
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