A system of tradable permits applied to fuel consumption by motorists

Charles Raux () and Grégoire Marlot
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Charles Raux: LET - Laboratoire d'économie des transports - UL2 - Université Lumière - Lyon 2 - ENTPE - École Nationale des Travaux Publics de l'État - CNRS - Centre National de la Recherche Scientifique
Grégoire Marlot: LET - Laboratoire d'économie des transports - UL2 - Université Lumière - Lyon 2 - ENTPE - École Nationale des Travaux Publics de l'État - CNRS - Centre National de la Recherche Scientifique

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Abstract: Decentralized transferable permit systems in the transport sector can be of interest with regard to reducing greenhouse gas emissions, in spite of anticipated transaction costs. This paper describes a concrete application of a domestic market for motor vehicle fuel consumption permits. The marginal costs of consumption reduction vary sufficiently according to motorists' residential locations to consider permit exchanges. Economic evaluation of this system reveals that there are transfers of surplus between the various groups of motorists according to their residential locations. The central government may lose significant revenues when compared with a conventional fuel tax. Lastly, the issue of transaction costs, the benefits and disadvantages in terms of social acceptability and equity are discussed.

Keywords: Transferable permits; Transport; Greenhouse gas; Surplus (search for similar items in EconPapers)
Date: 2004
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00093244
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Published in WCTRS, ITU. 10th World Conference on Transport Research - WCTR'04, 4-8 July 2004, Istanbul, Turkey, 2004, Lyon, France. 15 p

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