Willingness to Pay for CO₂ Emission Reductions in Passenger Car Transport

Passenger car transportation is a major contributor to global carbon emissions. Despite a range of policy measures, the European passenger car fleet remains largely running on fossil fuels. It is questionable whether the lack of emission reductions can be attributed to a lack of consumer preferences for low-emission cars because consumers may have imperfect information about cars’ emissions and the availability of clean cars remains limited. This paper investigates the preferences of consumers for emission reductions in passenger car transport. We estimate the willingness to pay of passenger car buyers for CO ₂ emission reductions by means of a choice experiment amongst a sample of 1471 individuals that represents the Dutch adult population with the intention to buy a car. The main results are that the mean willingness to pay for emission reductions equals €199 per tonne, and that the majority of individuals is willing to pay more than the current market premium for two selected hybrid types. These results suggest there is a large market potential for emission reductions in passenger car transport. Our findings imply that providing consumers with trustworthy information can be considered a key policy tool for achieving emission reductions in passenger car transport.