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Will a radical transport pricing reform jeopardize the ambitious EU climate change objectives?

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  • Proost, Stef
  • Delhaye, Eef
  • Nijs, Wouter
  • Regemorter, Denise Van

Abstract

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.

Suggested Citation

  • Proost, Stef & Delhaye, Eef & Nijs, Wouter & Regemorter, Denise Van, 2009. "Will a radical transport pricing reform jeopardize the ambitious EU climate change objectives?," Energy Policy, Elsevier, vol. 37(10), pages 3863-3871, October.
    • Handle: RePEc:eee:enepol:v:37:y:2009:i:10:p:3863-3871
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    References listed on IDEAS

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    1. 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. "How large is the gap between present and efficient transport prices in Europe?," Transport Policy, Elsevier, vol. 9(1), pages 41-57, January.
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    3. Mayeres, Inge & Proost, Stef, 2001. "Marginal tax reform, externalities and income distribution," Journal of Public Economics, Elsevier, vol. 79(2), pages 343-363, February.
    4. 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.
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    Cited by:

    1. Santos, Georgina & Behrendt, Hannah & Maconi, Laura & Shirvani, Tara & Teytelboym, Alexander, 2010. "Part I: Externalities and economic policies in road transport," Research in Transportation Economics, Elsevier, vol. 28(1), pages 2-45.
    2. van Vliet, Oscar & van den Broek, Machteld & Turkenburg, Wim & Faaij, André, 2011. "Combining hybrid cars and synthetic fuels with electricity generation and carbon capture and storage," Energy Policy, Elsevier, vol. 39(1), pages 248-268, January.
    3. Eliasson, Jonas & Proost, Stef, 2015. "Is sustainable transport policy sustainable?," Transport Policy, Elsevier, vol. 37(C), pages 92-100.
    4. Flachsland, Christian & Brunner, Steffen & Edenhofer, Ottmar & Creutzig, Felix, 2011. "Climate policies for road transport revisited (II): Closing the policy gap with cap-and-trade," Energy Policy, Elsevier, vol. 39(4), pages 2100-2110, April.
    5. Mayeres, Inge & Proost, Stef, 2013. "The taxation of diesel cars in Belgium – revisited," Energy Policy, Elsevier, vol. 54(C), pages 33-41.
    6. Danesin, Alessandro & Linares, Pedro, 2018. "The relevance of the local context for assessing the welfare effect of transport decarbonization policies. A study for 5 Spanish metropolitan areas," Energy Policy, Elsevier, vol. 118(C), pages 41-57.
    7. Fu, Miao & Andrew Kelly, J., 2012. "Carbon related taxation policies for road transport: Efficacy of ownership and usage taxes, and the role of public transport and motorist cost perception on policy outcomes," Transport Policy, Elsevier, vol. 22(C), pages 57-69.
    8. Montag, Josef, 2015. "The simple economics of motor vehicle pollution: A case for fuel tax," Energy Policy, Elsevier, vol. 85(C), pages 138-149.
    9. Christian Flachsland & Emily McGlynn & Jan Minx, "undated". "CITIES: Car Industry, Road Transport and an International Emission Trading Scheme – Policy Options," Reports 1, Department of Climate Change Economics, TU Berlin.

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