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Stimulating the Purchase of Environmentally Friendlier cars: A Socio-Economic Evaluation

Monday, 27 June, 2011 - 17:00
Campus: Brussels Humanities, Sciences & Engineering campus
Faculty: Social Sciences and Solvay Business School
Laurence Turcksin
phd defence

The finite nature of oil resources and the adverse environmental effects associated with the
purchase and use of conventionally fuelled vehicles demands a fundamental revision of our
current transportation system. Clean vehicle technologies (such as LPG, CNG, biofuels, electric
or hybrid electric cars) can provide an attractive solution to counterbalance these important
effects, but their market adoption on the Belgian level is fairly low. The objective of this
dissertation is to identify a policy strategy on how to stimulate the purchase of environmentally
friendlier cars by private households. A particular focus is on the financial considerations within
the individual car purchase decision process as these are prone to be affected by governmental
policy. Acting on the economic aspects by means of pricing measures, differentiated along the
environmental performance of the car, could be an effective way to promote the purchase of
cleaner vehicle technologies. The extent to which pricing measures will be effective in changing
people’s purchasing behaviour is first of all analysed in this PhD. For this purpose, a thorough
examination of the consumers’ individual characteristics is performed. In addition, a new
multidisciplinary model is established that empirically examines the shift to environmentally
friendlier cars as a result of single and combined pricing measures. Secondly, the effectiveness of
pricing measures also depends on their public acceptability, which is known to be larger if policy
measures are combined in a package comprising both “push” and “pull” measures. Moreover, the
existence of political pressures, lobbying, etc. might potentially hamper the effective
implementation of policy measures. The commitment and support from all involved stakeholders
(e.g., car manufacturers, fuel industry, NGOs) is more likely to happen if a clear, long-term
policy strategy is in place. That is why this dissertation has explicitly involved the stakeholders
in the establishment of three multi-instrumental policy packages (“baseline”, “realistic”,
“progressive”) to stimulate a cleaner vehicle fleet. The ultimate choice of the policy package will
depend on policy priorities, but it is advised that policy makers should have the political courage
to opt for the “progressive” scenario.

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