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Cost-effectiveness of greenhouse gas mitigation in transport: A review of methodological approaches and their impact

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  • Kok, Robert
  • Annema, Jan Anne
  • van Wee, Bert

Abstract

A review is given of methodological practices for ex ante cost-effectiveness analysis (CEA) of transport greenhouse gas (GHG) mitigation measures, e.g. fuel economy and CO2 standards for road vehicles in the US and EU. Besides the fundamental differences between different types of policies and abatement options which inherently result in different CEA outcomes, differences in methodological choices and assumptions are another important source of variation in CEA outcomes. Fourteen methodological issues clustered into six groups are identified on which thirty-three selected studies are systematically reviewed. The potential variation between lower and upper cost-effectiveness estimates for GHG mitigation measures in transport, resulting from different methodological choices and assumptions, lies in the order of $400 per tonne CO2-eq. The practise of using CEA for policy-making could improve considerably by clearly indicating the specific purpose of the CEA and its strengths and limitations for policy decisions. Another improvement is related to the dominant approach in transport GHG mitigation studies: the bottom-up financial technical approach which assesses isolated effects, implying considerable limitations for policy-making. A shift to welfare-economic approaches using a hybrid model has the potential to establish an improved assessment of transport GHG mitigation measures based on realistic market responses and behavioural change.

Suggested Citation

  • Kok, Robert & Annema, Jan Anne & van Wee, Bert, 2011. "Cost-effectiveness of greenhouse gas mitigation in transport: A review of methodological approaches and their impact," Energy Policy, Elsevier, vol. 39(12), pages 7776-7793.
  • Handle: RePEc:eee:enepol:v:39:y:2011:i:12:p:7776-7793 DOI: 10.1016/j.enpol.2011.09.023
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    Cited by:

    1. Saujot, Mathieu & Lefèvre, Benoit, 2016. "The next generation of urban MACCs. Reassessing the cost-effectiveness of urban mitigation options by integrating a systemic approach and social costs," Energy Policy, Elsevier, vol. 92(C), pages 124-138.
    2. M. AlSabbagh & Y. L. Siu & A. Guehnemann & J. Barrett, 2017. "Mitigation of CO2 emissions from the road passenger transport sector in Bahrain," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 22(1), pages 99-119, January.
    3. Levihn, F. & Nuur, C. & Laestadius, S., 2014. "Marginal abatement cost curves and abatement strategies: Taking option interdependency and investments unrelated to climate change into account," Energy, Elsevier, vol. 76(C), pages 336-344.
    4. Taylor, Simon, 2012. "The ranking of negative-cost emissions reduction measures," Energy Policy, Elsevier, vol. 48(C), pages 430-438.
    5. Nocera, Silvio & Tonin, Stefania & Cavallaro, Federico, 2015. "The economic impact of greenhouse gas abatement through a meta-analysis: Valuation, consequences and implications in terms of transport policy," Transport Policy, Elsevier, vol. 37(C), pages 31-43.
    6. Rahman, Syed Masiur & Khondaker, A.N., 2012. "Mitigation measures to reduce greenhouse gas emissions and enhance carbon capture and storage in Saudi Arabia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(5), pages 2446-2460.
    7. Jian Chai & Shubin Wang & Shouyang Wang & Ju’e Guo, 2012. "Demand Forecast of Petroleum Product Consumption in the Chinese Transportation Industry," Energies, MDPI, Open Access Journal, vol. 5(3), pages 1-22, March.
    8. Kok, Robert, 2015. "Six years of CO2-based tax incentives for new passenger cars in The Netherlands: Impacts on purchasing behavior trends and CO2 effectiveness," Transportation Research Part A: Policy and Practice, Elsevier, vol. 77(C), pages 137-153.
    9. Bishop, Justin D.K. & Martin, Niall P.D. & Boies, Adam M., 2014. "Cost-effectiveness of alternative powertrains for reduced energy use and CO2 emissions in passenger vehicles," Applied Energy, Elsevier, pages 44-61.

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