Personal tradable carbon permits for road transport: Why, why not and who wins?
Personal road transport sector poses a significant challenge in reducing carbon emissions. This paper evaluates a policy approach known as personal tradable carbon permits to reduce carbon emissions from personal vehicles. The policy is a downstream tradable permit where individuals are allocated carbon emission caps. The policy is qualitatively evaluated in the context of carbon taxes and some upstream tradable permit options. The biggest disadvantage of such a policy is the initial set up costs. Personal tradable permits, however, are more effective than carbon taxes and are also capable of stabilizing the gasoline prices faced by the consumers when the underlying oil prices fluctuate. Since equity effects are often a concern to policy makers, the effect of such personal carbon permits on the distribution of burden is quantified in a partial equilibrium framework for the US population. Different permit allocation strategies are investigated in this regard. Using US consumer expenditure survey data, and incorporating a differentiated price response for different households, we find that all three allocation strategies considered are progressive: a per adult based allocation is the most progressive, a per vehicle allocation nearer to proportional, and a per capita allocation in between the two. Personal tradable permits therefore take care of equity concerns directly through the design of the policy.
Volume (Year): 45 (2011)
Issue (Month): 10 ()
|Contact details of provider:|| Web page: http://www.elsevier.com/wps/find/journaldescription.cws_home/547/description#description|
|Order Information:|| Postal: http://www.elsevier.com/wps/find/supportfaq.cws_home/regional|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Michael Ahlheim & Friedrich Schneider, 2000.
"Allowing for Household Preferences in Emission Trading - A Contribution to the Climate Policy Debate,"
CESifo Working Paper Series
329, CESifo Group Munich.
- Michael Ahlheim & Friedrich Schneider, 2002. "Allowing for Household Preferences in Emission Trading – A Contribution to the Climate Policy Debate," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 21(4), pages 317-342, April.
- Michael Ahlheim & Friedrich Schneider, 2000. "Allowing for household preferences in emission trading-A contribution to the climate policy debate," Economics working papers 2000-09, Department of Economics, Johannes Kepler University Linz, Austria.
- Pezzey, John C.V., 2003.
"Emission Taxes and Tradable Permits: A Comparison of Views on Long Run Efficiency,"
2003 Conference (47th), February 12-14, 2003, Fremantle, Australia
58198, Australian Agricultural and Resource Economics Society.
- John Pezzey, 2003. "Emission Taxes and Tradeable Permits A Comparison of Views on Long-Run Efficiency," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 26(2), pages 329-342, October.
- John C. V. Pezzey, 2002. "EmissionTaxes and Tradable Permits: A Comparison of views on Long Run Efficiency," Economics and Environment Network Working Papers 0210, Australian National University, Economics and Environment Network.
- Parry, Ian, 2003.
"Are Emissions Permits Regressive?,"
dp-03-21, Resources For the Future.
- Niemeier, Debbie A. & Gould, Gregory & Karner, Alex & Hixson, Mark & Bachmann, Brooke & Okma, Carrie & Lang, Ziv & Heres Del Valle, David, 2008.
"Rethinking Downstream Regulation: California's Opportunity to Engage Households in Reducing Greenhouse Gases,"
Institute of Transportation Studies, Working Paper Series
qt2ct0n1xv, Institute of Transportation Studies, UC Davis.
- Niemeier, D. & Gould, Gregory & Karner, Alex & Hixson, Mark & Bachmann, Brooke & Okma, Carrie & Lang, Ziv & Heres Del Valle, David, 2008. "Rethinking downstream regulation: California's opportunity to engage households in reducing greenhouse gases," Energy Policy, Elsevier, vol. 36(9), pages 3436-3447, September.
- Daniel J. Graham & Stephen Glaister, 2002. "The Demand for Automobile Fuel: A Survey of Elasticities," Journal of Transport Economics and Policy, University of Bath, vol. 36(1), pages 1-25, January.
- S. Illeris & G. Akehurst, 2001. "Introduction," The Service Industries Journal, Taylor & Francis Journals, vol. 21(1), pages 1-4, January.
- Stavins Robert N., 1995. "Transaction Costs and Tradeable Permits," Journal of Environmental Economics and Management, Elsevier, vol. 29(2), pages 133-148, September.
- Woerdman, Edwin, 2001. "Emissions trading and transaction costs: analyzing the flaws in the discussion," Ecological Economics, Elsevier, vol. 38(2), pages 293-304, August.
- Charles Raux, 2004. "The Use of Transferable Permits in Transport Policy," Post-Print halshs-00067895, HAL.
- Raux, Charles & Marlot, Grégoire, 2005.
"A system of tradable CO2 permits applied to fuel consumption by motorists,"
Elsevier, vol. 12(3), pages 255-265, May.
- Charles Raux & Grégoire Marlot, 2005. "A System of Tradable CO2 Permits Applied to Fuel Consumption by Motorists," Post-Print halshs-00067833, HAL.
- Casler, Stephen D. & Rafiqui, Aisha, 1993. "Evaluating Fuel Tax Equity: Direct and Indirect Distributional Effects," National Tax Journal, National Tax Association, vol. 46(2), pages 197-205, June.
- Suits, Daniel B, 1977. "Measurement of Tax Progressivity," American Economic Review, American Economic Association, vol. 67(4), pages 747-52, September.
- E Verhoef & P Nijkamp & P Rietveld, 1997. "Tradeable permits: their potential in the regulation of road transport externalities," Environment and Planning B: Planning and Design, Pion Ltd, London, vol. 24(4), pages 527-548, July.
- Stavins, Robert, 1998. "Market-Based Environmental Policies," Discussion Papers dp-98-26, Resources For the Future.
- Zia Wadud & Daniel J. Graham & Robert B. Noland, 2010. "Gasoline Demand with Heterogeneity in Household Responses," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 47-74.
- David M. Cutler & Lawrence F. Katz, 1992.
"Rising Inequality? Changes in the Distribution of Income and Consumption in the 1980s,"
NBER Working Papers
3964, National Bureau of Economic Research, Inc.
- Cutler, David M & Katz, Lawrence F, 1992. "Rising Inequality? Changes in the Distribution of Income and Consumption in the 1980's," American Economic Review, American Economic Association, vol. 82(2), pages 546-51, May.
- Georgina Santos & Laurent Rojey, 2004. "Distributional impacts of road pricing: The truth behind the myth," Transportation, Springer, vol. 31(1), pages 21-42, February.
- Ian W. H. Parry & Kenneth A. Small, 2005.
"Does Britain or the United States Have the Right Gasoline Tax?,"
American Economic Review,
American Economic Association, vol. 95(4), pages 1276-1289, September.
- Parry, Ian & Small, Kenneth, 2002. "Does Britain or the United States Have the Right Gasoline Tax?," Discussion Papers dp-02-12-, Resources For the Future.
- Henrik Hammar, Asa Lofgren and Thomas Sterner, 2004. "Political Economy Obstacles to Fuel Taxation," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 1-18.
When requesting a correction, please mention this item's handle: RePEc:eee:transa:v:45:y:2011:i:10:p:1052-1065. See general information about how to correct material in RePEc.
If references are entirely missing, you can add them using this form.