Abstract for: Fuel taxes as an energy saving policy – potential misperceptions of dynamic effects

A road fuel tax is generally considered to be a cost-efficient policy instrument that internalizes some of the external costs of driving such as air pollution, greenhouse gas emissions, congestion and noise, and may also stimulate conservation and gradually improve the fuel economy of the car fleet. They are however often unpopular among the public, even when there is popular support for the principle of governmental policy to mitigate pollution and to reduce energy consumption. This study examines whether the opposition towards fuel taxes may partly be caused by misperceptions of some of their time-dynamic effects. First, we discuss the potential for misperceptions. Second, we use survey data from the United Kingdom to test the null hypothesis that the prospect of future oil scarcity will not change people’s attitude towards fuel taxes, while also testing whether respondents consider the effect of fuel taxes on fuel economy. We find that the opposition towards fuel taxes is strong and unchanged in a scenario of future oil scarcity, and we do not find evidence indicating that the effect of taxes on fuel economy is not considered. The results suggest that normative value positions or other misperceptions may be better explanatory factors.