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Transport, Health and Climate Change: Deciding on the Optimal Policy

Author

Listed:
  • Laure Cabantous
  • Olivier Chanel
  • Jean-Christophe Vergnaud

Abstract

Transport generates many externalities, some related to atmospheric pollution. In this paper, we focus on two: greenhouse gases, and local pollution. In the search for optimal transport policies, these two externalities have usually been analysed separately. Here, we study them jointly, in a sequential decision-making model. Our model allows for the irreversibility of the policies undertaken, as well as the possibility of a progressive reduction of uncertainties with the arrival of information. We find that when both sources of externalities are analysed jointly, structural measures enabling private transport requirements to be reduced are identified as being more advantageous economically than technological measures to reduce emissions of pollutants. We illustrate the usefulness of a joint analysis of externalities with two examples: tax measures on cars and housing policy.

Suggested Citation

  • Laure Cabantous & Olivier Chanel & Jean-Christophe Vergnaud, 2009. "Transport, Health and Climate Change: Deciding on the Optimal Policy," Economie Internationale, CEPII research center, issue 120, pages 11-36.
  • Handle: RePEc:cii:cepiei:2009-4ta
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    Keywords

    Climate change; model of decision-making under uncertainty; irreversibilities; transport policy;

    JEL classification:

    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

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