The effect of dieselization in passenger cars emissions for Spanish regions: 1998–2006

Following the goal of improving on-road fuel efficiency, the Spanish Government engaged in an active policy called the dieselization between 1998 and 2006, which was intended primarily for light duty vehicle (mostly passenger cars and SUV’s). However, the effect of the dieselization on controlling emissions has been questioned by many authors. At the Spanish national level, we first provide descriptive evidence of the effects of dieselization on passenger cars emissions. Second, we use a panel data set for 16 Spanish regions between 1998 and 2006, and estimate a dynamic panel data model that relates CO2 emissions generated by passenger cars with a set of variables related to the dieselization process, fuel efficiency and other control variables. Combining both analysis, we find the existence of a significant indirect, negative effect on CO2 emissions caused by the dieselization, which is more important than the direct, positive technology-efficiency impact.

► We examine the effect on road transport CO2 emissions of the dieselization process in Spain between 1998 and 2006.
► We estimate a dynamic panel data model that relates CO2 emissions and dieselization.
► We find the overall impact of dieselization on emissions is positive, though small.
► The ‘rebound’ effect on emissions has been more important than its direct, technology-efficiency impact.
► This result is highly robust to alternative econometric methods.