Climate Policies and the Transport Sector

Analysis of Policy Instruments, their Interactions, Barriers and Constraints, and resulting Effects on Consumer Behaviour

The study takes a closer look at the policy-induced price signals that affect transport in Europe (and abroad) with a focus on road private transport in particular.

As the transport sector has a significant greenhouse gases reduction potential and in contrast to common wisdom of high costs of emission reduction, there is a substantial reduction potential at a very low (or even negative) abatement costs. A broad range of transport-related taxes, duties, levies and charges, as well as a number of subsidies, influences any consumption and investment decision related to transport. The deployment of these instruments is reviewed in Chapter 1 of this study.

Chapter 2 of the study discusses the different regulatory systems that exist in the U.S. to regulate motor vehicle emissions and fuel efficiency. After presenting the three regulatory systems (the Environmental Protection Agency (EPA), the National Highway Traffic Safety Administration (NHTSA), and the State of California’s Air Resources Board (CARB)) the chapter presents policy developments that have taken place in the U.S. in recent years and concludes with a short policy assessment.

In Chapter 3 the research on elasticities in transport are reviewed in detail. The tentative conclusion that can be drawn after this review are that people are more sensitive to road prices, tolls and parking fees than to fuel prices, to quality of public transport services than to a reduction of fares, more so in areas with viable alternatives than in areas without, and more for leisure trips than for business trips and commuting.

Chapter 4 of the study takes a closer look at barriers, constraints and path-dependencies that present a hurdle for the effectiveness of carbon pricing in the road transport sector. Of these different barriers and constraints, this subchapter investigates three selected examples: fuel tourism, tax benefits for company cars, and the intra-European trading patterns of second-hand vehicles.

A largely underexploited potential is likely with soft measures that are discussed at length in Chapter 5. In Chapter 6, the effects that policy measures promoting the adoption of electric vehicles have on those vehicles’ total cost of ownership (TCO) is investigated. The study finds that the implementation of large registration fees for non-EVs and a bonus-malus scheme, which accrue significant consumer savings very early on in the life of the vehicle are particularly effective. To further explore electric vehicle purchasing decisions, existing studies on (stated) preferences for low carbon vehicles are reviewed in Chapter 7.

Attachment: 

Citation: 

Máca, Vojtěch; Eberle, Andrew; Pearson, Adam; Ridgway, Monica; Braun Kohlová, Markéta; Görlach, Benjamin, Novák, Jan; Ščasný, Milan. 2013. Climate Policies and the Transport Sector. Analysis of Policy Instruments, their Interactions, Barriers and Constraints, and resulting Effects on Consumer Behaviour. CECILIA2050 WP2 Deliverable 2.3. Berlin, Ecologic Institute.

Funding: 

European Commission

Authors: 

Chapter 1 - Vojtěch Máca (Charles University Environment Center) Chapter 2 - Andrew Eberle, Adam Pearson, and Monica Ridgway (Ecologic Institute) Chapter 3 & 5 - Markéta Braun Kohlová (Charles University Environment Center) Chapter 4 - Benjamin Görlach (Ecologic Institute) Chapter 6 - Andrew Eberle, Monica Ridgway, Benjamin Görlach, and Adam Pearson (Ecologic Institute) Chapter 7 - Jan Novák and Milan Ščasný (Charles University Environment Center)

Year of publication: 

2014

Number of pages: 

151

Table of contents: 

0

Executive summary

9

1

Policy instruments in the EU transport sector – an overview

12

1.1.

Interactions and policy mixes

14

1.2.

Road transport

15

1.3.

Non-road modes

31

1.4.

Effectiveness of instruments

35

1.5

Cost-effectiveness

43

1.6

Concluding notes

46

2.

American vehicle emission regulation schemes

48

2.1.

Recent Developments

50

2.2.

Policy Assessment

53

3.

Review of transport elasticities

54

3.1.

Transport demand and elasticity

54

3.2.

Patterns in the observed elasticity values

55

3.3.

Selected individual elasticities

60

3.4.

Specific estimates and modelling process

66

3.5.

Trends in price and income elasticities

67

4.

Limits to carbon pricing in the road transport sector: barriers, constraints and path-dependencies

70

4.1.

Fuel tourism

70

4.2.

Company car tax policies

75

4.3.

Second hand car markets

80

4.4.

Conclusions

85

5.

Soft transportation policy measures

87

5.1.

Mobility Management/Soft Transport Policy Measure – the definition

87

5.2.

Are soft policy measures effective? The evidence

90

5.3.

Long-term effects

94

5.4.

The effects of individual policy design

95

5.5.

Known biases and limitations in the empirical evidence gathered

96

5.6.

What is needed: agenda for future research

99

5.7.

Prospective theory of behavioural change – major requirement for applicable knowledge

101

5.8.

Summary of policy relevant findings – elevator

103

6.

Total cost of ownership of electric vehicles under various incentives

104

6.1.

Introduction

104

6.2.

Methodology

105

6.3.

Results

114

6.4.

Discussion

119

6.5.

Conclusion

121

6.6.

Appendix

123

7.

Valuation of individual preferences for low-carbon passenger vehicles – a review

131

7.1.

Introduction

131

7.2.

Review of European valuation studies

132

7.3.

Willingness to pay for vehicle attribute

136

7.4.

Conclusions

138

8.

References

139