This paper proposes a dynamic carbon tax (DCT) that stabilises gasoline prices by adjusting inversely to crude oil prices. Compared to a standard fixed-rate carbon tax, the DCT can be expected to cut more CO2 emissions while receiving greater public support. Therefore, it could be a useful...

We study the local distortionary effects of notches in Spain’s CO2-based vehicle registration tax on the distribution of new car CO2 performance. These effects are the smoking gun of carmaker strategic behaviour and affect in turn tax revenue and CO2 emissions. Using model-level data on all...