Feebates for Fuel Economy: Market Incentives for Encouraging Production and Sales of Efficient Vehicles

Research Report T921


John DeCicco, Howard Geller, and John Morrill


The use of new vehicle purchase price incentives to promote the fuel economy of cars and light trucks is discussed in this paper. It examines the options and the expected impact of incentives taking the form of fees and rebates ("feebates"). A prototype proposal accounting for vehicle size is analyzed in detail.