A road fuel tax can 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. Fuel taxes are however often unpopular among the public, even when there is popular support for the principle of governmental policy to mitigate pollution and improve energy efficiency. This study is a first step in examining whether some of the opposition towards fuel taxes could be the result of overlooking or misperceiving some of the time-dynamic effects in the fuel tax system. While principle-based tax resistance may be unlikely to change quickly, resistance that is the result of misperceptions or overlooked factors could potentially be reduced if the economic system of fuel taxation was better understood. First, in part 1, we discuss the potential for overlooked factors and misperceptions. Second, in part 2 we use survey data from the United Kingdom to test for one potentially overlooked factor in the fuel tax system directly, namely the effect of fuel taxes on the average fuel economy of the car fleet. We find that the opposition towards fuel taxes is strong, and we do not find evidence indicating that the effect of taxes on fuel economy is not considered. Respondents also provide good estimates of the delay associated with changing the composition of the car stock. The results could be explained by the finding that respondents do not seem to have a high willingness to pay for having a more fuel economic car fleet as a country, even in a situation where high oil prices in the future are considered a risk. This indicates principled opposition rather than misunderstandings or overlooked factors. Future studies could examine more of the potential misperceptions and overlooked factors that are presented in part 1.
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