The motor vehicle taxis as an instrument for climate protection

With the motor vehicle tax reform that takes effect in mid-2009, the German federal government is following policy goals in climate protection. The reform envisions a combined CO2 and engine cubic-capacity tax for new vehicles. This motor vehicle tax reform is a step in the right direction, since it provides incentives for the purchasing of new, low-emission vehicles. The cubic-capacity component weakens this effect, however, since engine size is not proportional to CO2 emissions. For vehicles with emissions of more than 150 g/km, this leads to an unsystematic variation of the motor vehicle tax burden, which would be avoided by the introduction of a pure CO2 tax assessment. Climate protection would be better served by transferring the motor vehicle tax to the energy tax.