The fuel efficiency of passenger cars is often emphasised as one of the most significant areas of action in terms of limiting the transport sector's CO2 emission levels. This could be achieved either on the supply side through the technological development of cars, or through demand-side measures such as influencing first time buyers' choice of car. The aim of this article is twofold. Firstly, to present a model for Denmark on car buyers' choice of new cars. Secondly, to use the model to analyse which measures can be applied to obtain a more efficient car fleet. Hence, the main focus is on studying consumer behaviour so as to achieve a tool to analyse the possibilities of improving fuel efficiency for new passenger cars through changes in the tax structure. The model is based on Danish data on all buyers of new cars in 1997, and supply and demand data are combined in the analysis in order to study the relationship between individuals and the choice of car. The analysis confirms that there is a potential for reducing the average fuel consumption of the car fleet. A change in the registration tax can therefore form a part of a strategy to reduce the transport sector's CO2 emissions. However, differentiating the registration tax does not imply substantial reductions in CO2 emissions. Finally, the model forecast is compared to more recent modelling results for other European countries. These results are based on market data from EU member states and a cross-country car choice model based on new cars sold in 1999/2000.
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