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

Felix Creutzig (), Emily McGlynn, Jan Minx and Ottmar Edenhofer

No 1, Working Papers from Department of Climate Change Economics, TU Berlin

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).

Keywords: Fuel efficiency standards; low carbon fuel standards; climate change (search for similar items in EconPapers)
JEL-codes: Z0 Z1 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2010-12, Revised 2010-12
New Economics Papers: this item is included in nep-ene, nep-env and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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http://ideas.climatecon.tu-berlin.de/documents/wpaper/CLIMATECON-2010-01.pdf First version, 2010 (application/pdf)

Related works:
Journal Article: Climate policies for road transport revisited (I): Evaluation of the current framework (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:ecc:wpaper:1

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