Evaluating a Carbon Tax : France as a Case Study - CO2 Emissions from Cars

Abstract: This quasi-experimental study is the first to evaluate the French experience of adding a carbon tax directly onto existing taxes on fossil fuel consumption by performing an econometric case study. Furthermore, the introduction of the French carbon tax resulted in the so called “yellow vests protests”, the protests acted as a catalyst, and further stressed the need to evaluate environmental taxes, not only in relation to combating global warming but also regarding the procedures of providing information to the public. Correctly estimating the effects of the French tax can then provide the crucial information needed. This thesis finds a significant effect of carbon taxes on emissions, analysing the implementation of a carbon component on transport fuel in France. After the policy intervention, carbon dioxide emissions from cars declined 6.3 per cent every year between 2016-2019, relative to a synthetic control unit constructed from a grouping of similar EU countries.