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Greenhouse Gas Emissions and Price Elasticities of Transport Fuel Demand in Belgium


  • Tom Schmitz

    (Pompeu Fabra University)


Since 1990, Belgium has managed to bring down greenhouse gas emissions in most domains of economic activity. Road transport, as in many other countries, is a notable exception to this pattern: emissions have steadily increased, driven by an ever higher consumption of petrol and diesel. Even though the current overall performance will probably be sufficient to reach the reduction objectives of the Kyoto protocol, transport emissions thus need to be targeted in the future. One possible measure aimed at reducing them, an increase in fuel taxes, is examined in detail in this paper. The success of such a policy depends on the price elasticity of fuel demand, and therefore, the latter is estimated for Belgium and other European countries. The elasticities obtained are relatively small: in Belgium, for instance, a 10% increase in prices would cause consumption to fall by around 1.8% in the short-run and 2.3% in the medium run. Tax increases alone will thus certainly be insufficient for cutting emissions at this time horizon. Nevertheless, as a supporting measure in a more general reduction strategy, they could still yield substantial advantages. This Working Paper relates to the 2011 OECD Economic Review of Belgium ( Émissions de gaz à effet de serre et élasticités-prix de la demande de carburants en Belgique Depuis 1990, la Belgique a réussi à réduire ses émissions de gaz à effet de serre (GES) dans la plupart des domaines d'activité économique. Comme dans de nombreux autres pays, le transport routier constitue à cet égard une exception notable : ses émissions ont régulièrement augmenté, sous l'effet d'une consommation toujours croissante d'essence et de gazole. Même si les performances globales actuelles seront sans doute suffisantes pour atteindre les objectifs de réduction des émissions de GES du Protocole de Kyoto, un objectif doit donc être défini pour les futures émissions des transports. Une des mesures envisageables pour les faire diminuer, une hausse des taxes sur les carburants, est examinée de manière approfondie dans ce document. La réussite d'une telle mesure dépend de l'élasticité-prix de la demande de carburants, ce qui nous amène à estimer celle-ci pour la Belgique et d'autres pays européens. Les élasticités obtenues sont relativement modestes : en Belgique, par exemple, une hausse des prix de 10 % entraînerait un recul de la consommation de l'ordre de 1.8 % à court terme, et de 2.3 % à moyen terme. De simples augmentations des taxes seront donc certainement insuffisantes pour réduire les émissions à cet horizon. Néanmoins, en tant que mesures d'accompagnement s'inscrivant dans le cadre d'une stratégie plus générale de réduction des émissions de GES, elles pourraient avoir des retombées positives substantielles. Ce Document de travail se rapporte à l’Étude économique de l’OCDE de la Belgique 2011 (

Suggested Citation

  • Tom Schmitz, 2012. "Greenhouse Gas Emissions and Price Elasticities of Transport Fuel Demand in Belgium," OECD Economics Department Working Papers 955, OECD Publishing.
  • Handle: RePEc:oec:ecoaaa:955-en

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    References listed on IDEAS

    1. Isabelle Joumard & Mauro Pisu & Debra Bloch, 2012. "Less Income Inequality and More Growth – Are They Compatible? Part 3. Income Redistribution via Taxes and Transfers Across OECD Countries," OECD Economics Department Working Papers 926, OECD Publishing.
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    More about this item


    Belgique; Belgium; elasticity of fuel demand; fuel taxes; greenhouse gas emissions; road transport; taxes sur les carburants; transport routier; élasticité de la demande de carburants; émissions de gaz à effet de serre;

    JEL classification:

    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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