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How Should Transport Emissions Be Reduced?: Potential for Emission Trading Systems

Charles Raux

No 2008/1, OECD/ITF Joint Transport Research Centre Discussion Papers from OECD Publishing

Abstract: In developed countries, transport generates approximately 25 to 30 per cent of emissions of CO2, the main greenhouse gas (GHG) and these emissions are increasing sharply. There are two explanations for the increase in emissions from transport: the first is dependency on the internal combustion engine for transport with no wide-scale economically viable alternative available in the medium term; the second is the sharp increase in vehicle-kilometres travelled, which seems to be an inherent feature of economic development. One might well ask, given announcements that oil reserves will run out rapidly, whether we should not simply wait until reserves dry up to obtain a reduction in transport-related emissions. This said, rising oil prices are gradually making it more viable to exploit unconventional reserves, leaving aside innovations in technology which are reportedly opening up prospects for new fossil fuels (including fuels derived from coal, which is in plentiful supply world-wide). Hence, there is every reason to believe that the use of fossil fuels could continue on a large scale in the future. Foresight studies show that if our aim is to achieve ambitious GHG emission control targets for transport within the next few decades, the policies we implement will have to be more determined: among other things, they should aim at reducing total consumption that is to say vehicle kilometres travelled, not just unitary vehicle consumption (cf. ENERDATA and LEPII, 2005 for France, for instance). Among the measures identified, carbon taxes and vehicle taxes are the most cost-effective (OECD, 2007; Parry et al., 2007). However, the “fuel tax protests” of September 2000 in several European countries show that public opinion is very resistant to fuel tax increases (Lyons and Chatterjee, 2002). This resistance can also be explained by concerns about fairness, since many households depend on the car for day-to-day living and for getting to work. As well as this, fuel tax increases would require the international harmonization of fuel taxation in different countries, which seeing what has happened in the European Union appears to be extremely difficult.

Date: 2008-01-01
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