A tractable general equilibrium model is developed to analyze the welfare implications of a biofuel blend mandate and consumption subsidy in the presence of pre-existing labor and fuel taxes. The tax interaction and revenue recycling effects are significant relative to the overall costs of the...

We analyze welfare implications of policies promoting environmentally friendly vehicles employing rich Swiss micro-data on 23,000 newly purchased cars and their buyers. Our estimates reveal substantial income heterogeneity in price elasticity and electric vehicle (EV) adoption. While CO2 levies...