Abstract
The EU decarbonization strategy foresees deep cuts in CO2 in the transport sector. Investment in infrastructure, manufacturing of new technology vehicles and production of alternative fuels induce macroeconomic changes in activity and employment for both national and regional economies. The objective of the paper is to present a newly built macroeconomic-regional model (GEM-E3-R general equilibrium model for economy, energy and environment for regions) for assessing impacts of transport sector restructuring on regional economies of the entire EU, segmented following NUTS-3 (nomenclature of territorial units of statistics). The model combines general economic equilibrium theory with location choice and New Economic Geography and implements a dynamic, fully endogenous agglomeration-dispersion mechanism for people and industries coupled with a gravity model for bilateral interregional flows. A novelty of the model is a two-layers structure: (i) the country-wide layer formulated as a global multi-sector, multi-country and multi-period computable general equilibrium (CGE) model; and (ii) the regional economy layer, which simulates impacts on regional economies, while considering country-wide economic trends as boundary conditions. The paper presents a use of the model in the assessment of regional economic effects of electrification of car mobility in Europe and wide use of domestically produced advanced biofuels.
Highlights
Carbon dioxide emitted in the EU transport sector accounted for 27% of total EU-wide greenhouse gas (GHG) emissions in 2016, according to Reference [1]
They depend on several features of the regional economies, which mainly concern the specializations and the resource endowments of the regions
A region with resources able to produce biofuels will see a rise in activities that would be beneficial to the regional economy, activity, income, and employment via the multiplier effect
Summary
Carbon dioxide emitted in the EU transport sector accounted for 27% of total EU-wide greenhouse gas (GHG) emissions in 2016, according to Reference [1]. Transport-related expenditures represent 12–15% of total expenditures by firms and households, while the supply of transport services employs million persons directly and an additional million indirectly, according to Reference [2]. Decarbonizing transport is essential for achieving the EU low carbon emission targets. The European Commission’s climate policy regarding the transport sector, as described in the White Paper on transport in 2011, see Reference [3], and re-confirmed in the 2018 “A Clean Planet for All” long-term strategy, see Reference [4], has set ambitious targets for reducing transport-related emissions. The strategy envisages ways to decarbonize the vehicle fleet, mainly through electrification, the use of biofuels and carbon-free alternative fuels
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