Feebates, Unlikely Solution for Reducing Car Emissions

Experts on fuel efficiency and vehicle markets gathered on Monday, April 21, in Sacramento, Calif., to explore the idea of feebates as a strategy for reducing carbon emissions from cars and trucks.

California is trying to bridge the gap between current greenhouse gas laws—and the level of emissions the state has pledged to reach under AB32, the far-reaching Global Warming Solutions Act of 2006. The state is targeting the transportation sector because the 25 million cars and trucks in California produce almost 40 percent of the state’s greenhouse gas emissions.

Feebates are a combination of a FEE (or tax) on inefficient vehicles and a reBATE for ones that are more efficient. The idea is that the money balances out and the program pays for itself—that is, the fees from some of the car buyers become the rebates given to others. In the symposium, examples were offered of similar systems being adopted in Europe to reward the manufacturers and buyers of cars with low CO2 emissions, while collecting from the less-efficient ones.

Walter McManus from the University of Michigan’s Transportation Research Institute gave a detailed analysis of feebates, which he believed could achieve 34% more emissions reductions than either CAFE. Brian Moss, from California’s New Car Dealers Association, disagreed. Moss challenged the assumption that consumers would embrace feebates, warning that real-world use of feebates often work out differently than they do in academic forecasts.

Spencer Quong from the Union of Concerned Scientists reviewed several of the forms a feebate could take, noting that the type of feebate chosen could either limit or allow consumer vehicle choice. Some economists suggest that a greenhouse gas feebate would speed the declining market share of American manufacturers and give a boost to Japanese automakers with more efficient vehicles.

Honda’s John German said that getting feebates right would take a “large expenditure of political capital.” For that reason alone, it appears unlikely that a feebate system will be put into place. A bill to start a feebate system in California was introduced earlier this year, but went nowhere. A Canadian feebate proposal is likely to suffer the same fate.


  • Shines

    A modern day Robin Hood?!? Yeah right…
    Sure – lets create a special government agency that takes money from some folks and gives it to somebody else.
    Wait – isn’ that what the IRS does already?
    We have vehicle excise taxes based on vehicle weight for helping with road repairs.
    Lets just call this feebate what it really is – a fuel economy tax.
    Another tax (sigh)
    If you drive something that gets lousy mileage you pay more tax – use the tax revenue to support alternative energy and fuel economy research. blah blah blah…

  • VaPrius

    “Some economists suggest that a greenhouse gas feebate would speed the declining market share of American manufacturers and give a boost to Japanese automakers with more efficient vehicles”

    Well of course! American manufacturers abandoned fuel efficient cars decades ago. That’s why, along with quality, that Toyota is the largest manufacturer in the world. Non-US manufacturers avoided the big vehicle segment until recent years.

    And yes Shines it is a tax on the worst offenders. Sounds like a perfect plan.

  • Need2Change

    I don’t see freebates working.

    The person who wants to buy a 15 mpg Dodge Challenger with $2000 gas gusler tax will not be swayed by an additional modest tax.

    The person who wants a fuel effecient car won’t be encouraged to buy a fuel effecient car because of a rebate.

    But the real problem is that if it works, it might put the US auto industry out of business. It’s designed to discourage people from buying Cads, Lincolns, Buicks, Chrysler 300s, SUVs, full size cars, pickup trucks, Crossovers, etc. This is where the US auto indsutry makes money.

    And is designed to support buying foreign makes: Toyotas, Hondas, Minicoopers, Volkwagens, etc.

    This would put the US in a depression, and further weaken the dollar.

  • Armand

    What we need are very large fees on vehicle licensing…like California would have had if all the pansies here didn’t start crying about the REAL cost of driving around in LA with no purpose other than to show off.

    PLUS…give very very heavy fines to polluters…so they will learn their lessons and not doing it again.

    Is this what the human race has come to? Piss away resources just for enjoyment and showing off? If so, we deserve to perish.

  • Patrick

    Feebate in place in Europe?

    Sure. We in Belgium have a fuel tax that makes gasoline cost US$ 2.4 per liter or US$ 8.9 per gallon today. So anyone saving on mileage or buying a car with good mileage gets a feebate.

  • Shines

    So Need2Change, you say
    It’s designed to discourage people from buying Cads, Lincolns, Buicks, Chrysler 300s, SUVs, full size cars, pickup trucks, Crossovers, etc.
    This is where the US auto indsutry makes money.
    So the US auto industry Needs2Change…. right?
    If not we keep buying arabian (terrorists?) oil giving them money so they can attack us so we can attack them back.
    I’m not for more taxes generally, I think the high price of fuel will force the issue anyway.

  • Ross Nicholson

    Tax air pollution. Tax air pollution and tax it progressively. If you use less than your allotment, you can sell it to someone else or just back to the system (for less). Corporations wouldn’t get an allotment, only private citizens. See? The economic result is identical to your impolitic ‘feebate’ but stated in a way people can understand & agree with.

    If pollution taxes were levied against polluters, then gasoline and diesel fuel users would have to pay for any resulting pollution. Right now the state supports petroleum pollution because they don’t force polluters to pay for the damage they cause. Solar doesn’t cause any pollution, it doesn’t get taxed. Let the market regulate the price of fuel, but have inefficient fuel use that causes pollution pay for the public cost of that pollution–like the cigarette companies are having to pay for medicare costs of hospitalizing so many smokers. That way the true price will be paid and the market can respond efficiently.

  • Autocar-Live

    I have submitted your article to http://www.autocar-live.com which is a social site about cars where users submit car/auto articles they like and vote for articles that others submitted and they like.

  • shade

    the hydrogen generator, water for fuel, for all vehicles is availible and should be installed in every vehicle,this product cuts vehicle emission gases in half,and it also gives an estimated 5 to 10 additional mpg.this product should come with every new vehicle sold,this would also extend the life of every vehicle and would save a lot of the worlds supply of oil,there is no need to tax us to death,would only make people angry and spend even less,its just another reason for the wealthy to make more tax revenue to only satisfy there own greed,and if you truly feel there should be a tax for this it should only be for custom race cars because there is certainly no need for those type of vehicles and any person with that kind of car must have plenty of money to burn so why not just tax them to death and not an average american trying to make a living.

  • smallmountain

    Yes, the US auto industry is failing because that failed to innovate. So, isn’t that a fair play in capitalism?