Will a radical transport pricing reform jeopardize the ambitious EU climate change objectives?
This paper examines the effects of replacing current fuel taxes by a system of taxes that account better for all the different external costs of the different transport modes. One of the important implications of this reform is that current fuel taxes are decreased to a level of 80 euro/ton of CO2 but that the mileage related taxes on car and truck use increase. Using the TREMOVE model for the transport sector of 31 European countries, one finds that the volume of transport will decrease because current taxes on transport are too low compared to overall external costs. Overall CO2 emissions will decrease slightly. Using the MARKAL-TIMES model for the Belgian energy sector, putting all sectors and technologies on equal footing shows that a fuel tax reform makes that it is not cost efficient to require large CO2 emission reductions in the transport sector and that traditional car technologies will continue to dominate the car market in 2020-2030.
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- Proost, S. & Van Dender, K. & Courcelle, C. & De Borger, B. & Peirson, J. & Sharp, D. & Vickerman, R. & Gibbons, E. & O'Mahony, M. & Heaney, Q. & Van den Bergh, J. & Verhoef, E., 2002.
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- Stef Proost & Kurt Van Dender & Christoph Courcelle & John Peirson & Duncan Sharp, 2001. "How large is the gap between present and efficient transport prices in Europe?," Chapters, in: Reforming Transport Pricing in the European Union, chapter 17 Edward Elgar.
- Stef Proost & Kurt Van Dender & C. Courcelle & B. De Borger & J. Peirson & D. Sharp & R. Vickerman & E. Gibbons & M. O'Mahony & Q. Heaney & J. Van den Bergh & E. Verhoef, 2001. "How large is the gap between present and efficient transport prices in Europe?," Energy, Transport and Environment Working Papers Series ete0120, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Energy, Transport and Environment.
- Dreyfus, Mark K & Viscusi, W Kip, 1995. "Rates of Time Preference and Consumer Valuations of Automobile Safety and Fuel Efficiency," Journal of Law and Economics, University of Chicago Press, vol. 38(1), pages 79-105, April.
- S. Proost & D. Regemorter, 1995. "The double dividend and the role of inequality aversion and macroeconomic regimes," International Tax and Public Finance, Springer, vol. 2(2), pages 207-219, August.
- Inge Mayeres & Stef Proost, 1998.
"Marginal Tax Reform, Externalities and Income Distribution,"
Center for Economic Studies - Discussion papers
ces9832, Katholieke Universiteit Leuven, Centrum voor Economische Studiën.
- Mayeres, Inge & Proost, Stef, 2001. "Marginal tax reform, externalities and income distribution," Journal of Public Economics, Elsevier, vol. 79(2), pages 343-363, February.
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