@article{Paltsev:332645,
      recid = {332645},
      author = {Paltsev, Sergey and Chen, Y.-H. Henry and Karplus, Valerie  and Kishimoto, Paul and Reilly, John},
      title = {CO2 Emissions, Energy, and Economic Impacts of CO2  Mandates for New Cars in Europe},
      address = {2015},
      year = {2015},
      note = {Presented at the 18th Annual Conference on Global Economic  Analysis, Melbourne, Australia},
      abstract = {CO2 emissions mandates for new light-duty passenger  vehicles have recently been adopted in the European Union  (EU), which require steady reductions to 95 g CO2/km in  2021. Using a computable general equilibrium (CGE) model,  we analyze the impact of the mandates on oil demand, CO2  emissions, and economic welfare, and compare the results to  an emission trading scenario that achieves identical  emissions reductions. We find that while the mandates  reduce the CO2 emissions from transportation by about 50  MtCO2 in 2020 and reduce oil expenditures by about 4.7-6.2  billion Euro in 2020, the net cost of the mandates is 12  billion Euro/year in 2020. Tightening CO2 standards  increases the welfare cost for the EU. In 2015 the policy  costs are estimated at 0.7 billion Euro/year, in 2020 the  cost increases to about 12 billion Euro/year, and keeping  the 2021 target unchanged leads to a consumption loss of  about 24 billion Euro/year in 2025. Increasing the  stringency of CO2 emissions targets further leads to a  consumption loss of 40-63 billion Euro/year in 2025. CO2  mandates are less cost effective than an emission trading  scheme, with year-on-year consumption loss rising to 0.69%  in 2025 under the proposed emission standard, compared to  0.08% under an emission trading system that  achieves an  equivalent reduction in CO2 emissions.},
      url = {http://ageconsearch.umn.edu/record/332645},
}