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Climate policies for road transport revisited (I): Evaluation of the current framework

Author

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  • Felix Creutzig

    (Department of Economics of Climate Change, TU Berlin)

  • Emily McGlynn
  • Jan Minx
  • Ottmar Edenhofer

Abstract

The global rise of greenhouse gas (GHG) emissions and its potentially devastating consequences require a comprehensive regulatory framework for reducing emissions, including those from the transport sector. Alternative fuels and technologies have been promoted as means for reducing the carbon intensity of the transport sector. However, the overall transport policy framework in major world economies is geared towards the use of conventional fossil fuels. This paper evaluates the effectiveness and efficiency of current climate policies for road transport that (1) target fuel producers and/or car manufacturers, and (2) influence use of alternative fuels and technologies. With diversifying fuel supply chains, carbon intensity of fuels and energy efficiency of vehicles cannot be regulated by a single instrument. We demonstrate that vehicles are best regulated across all fuels in terms of energy per distance. We conclude that price-based policies and a cap on total emissions are essential for alleviating rebound effects and perverse incentives of fuel efficiency standards and low carbon fuel standards. In tandem with existing policy tools, cap and price signal policies incentivize all emissions reduction options. Design and effects of cap and trade in the transport sector are investigated in the companion article (Flachsland et al., 2010).

Suggested Citation

  • Felix Creutzig & Emily McGlynn & Jan Minx & Ottmar Edenhofer, 2010. "Climate policies for road transport revisited (I): Evaluation of the current framework," Working Papers 1, Department of Climate Change Economics, TU Berlin, revised Dec 2010.
  • Handle: RePEc:ecc:wpaper:1
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    1. Corjan Brink & Herman R.J. Vollebergh, 2020. "What Can We Learn from EU ETS?," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 18(01), pages 23-29, April.
    2. Meiting Tu & Ye Li & Lei Bao & Yuao Wei & Olivier Orfila & Wenxiang Li & Dominique Gruyer, 2019. "Logarithmic Mean Divisia Index Decomposition of CO 2 Emissions from Urban Passenger Transport: An Empirical Study of Global Cities from 1960–2001," Sustainability, MDPI, vol. 11(16), pages 1-16, August.
    3. Ruzzenenti, Franco & Basosi, Riccardo, 2017. "Modelling the rebound effect with network theory: An insight into the European freight transport sector," Energy, Elsevier, vol. 118(C), pages 272-283.
    4. Bhardwaj, Chandan & Axsen, Jonn & Kern, Florian & McCollum, David, 2020. "Why have multiple climate policies for light-duty vehicles? Policy mix rationales, interactions and research gaps," Transportation Research Part A: Policy and Practice, Elsevier, vol. 135(C), pages 309-326.
    5. Yoo, Sunbin & Koh, Kyung Woong & Yoshida, Yoshikuni & Wakamori, Naoki, 2019. "Revisiting Jevons's paradox of energy rebound: Policy implications and empirical evidence in consumer-oriented financial incentives from the Japanese automobile market, 2006–2016," Energy Policy, Elsevier, vol. 133(C).
    6. Alina Zaharia, 2015. "EU’s road transport sector in the context of green economy," International Conference on Competitiveness of Agro-food and Environmental Economy Proceedings, The Bucharest University of Economic Studies, vol. 4, pages 177-185.
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    11. Hans, Michiels & Carolien, Beckx & Liesbeth, Schrooten & Stijn, Vernaillen & Tobias, Denys, 2012. "Exploring the transition to a clean vehicle fleet: From stakeholder views to transport policy implications," Transport Policy, Elsevier, vol. 22(C), pages 70-79.
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    13. Ovaere, Marten & Proost, Stef, 2022. "Cost-effective reduction of fossil energy use in the European transport sector: An assessment of the Fit for 55 Package," Energy Policy, Elsevier, vol. 168(C).
    14. Felix Creutzig & Christoph von Stechow & David Klein & Carol Hunsberger & Nico Bauer & Alexander Popp & Ottmar Edenhofer, 2012. "Can Bioenergy Assessments Deliver?," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 2).
    15. Skeete, Jean-Paul, 2017. "Examining the role of policy design and policy interaction in EU automotive emissions performance gaps," Energy Policy, Elsevier, vol. 104(C), pages 373-381.
    16. repec:fes:wpaper:wpaper77 is not listed on IDEAS
    17. von Rosenstiel, Dirk Peters & Heuermann, Daniel F. & Hüsig, Stefan, 2015. "Why has the introduction of natural gas vehicles failed in Germany?—Lessons on the role of market failure in markets for alternative fuel vehicles," Energy Policy, Elsevier, vol. 78(C), pages 91-101.
    18. Lutsey, Nicholas, 2012. "Regulatory and technology lead-time: The case of US automobile greenhouse gas emission standards," Transport Policy, Elsevier, vol. 21(C), pages 179-190.
    19. AlSabbagh, Maha & Siu, Yim Ling & Guehnemann, Astrid & Barrett, John, 2017. "Integrated approach to the assessment of CO2e-mitigation measures for the road passenger transport sector in Bahrain," Renewable and Sustainable Energy Reviews, Elsevier, vol. 71(C), pages 203-215.
    20. Font Vivanco, David & Kemp, René & van der Voet, Ester, 2016. "How to deal with the rebound effect? A policy-oriented approach," Energy Policy, Elsevier, vol. 94(C), pages 114-125.
    21. Solaymani, Saeed & Kardooni, Roozbeh & Yusoff, Sumiani Binti & Kari, Fatimah, 2015. "The impacts of climate change policies on the transportation sector," Energy, Elsevier, vol. 81(C), pages 719-728.
    22. Felix Creutzig & Rainer Mühlhoff & Julia Römer, 2012. "One Planet Mobility - Transforming Cities towards Low-Carbon Mobility," Working Papers 1, Department of Climate Change Economics, TU Berlin, revised Feb 2012.
    23. Pérez-López, Paula & Gasol, Carles M. & Oliver-Solà, Jordi & Huelin, Sagrario & Moreira, Ma Teresa & Feijoo, Gumersindo, 2013. "Greenhouse gas emissions from Spanish motorway transport: Key aspects and mitigation solutions," Energy Policy, Elsevier, vol. 60(C), pages 705-713.
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    25. Łukasz Warguła & Piotr Kaczmarzyk, 2022. "Legal Regulations of Restrictions of Air Pollution Made by Mobile Positive Pressure Fans—The Case Study for Europe: A Review," Energies, MDPI, vol. 15(20), pages 1-11, October.

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    More about this item

    Keywords

    Fuel efficiency standards; low carbon fuel standards; climate change;
    All these keywords.

    JEL classification:

    • Z0 - Other Special Topics - - General
    • Z1 - Other Special Topics - - Cultural Economics

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