Abstract
The European Union aims at net-zero emissions by 2050. A key sector to achieve this goal is road transport, where emissions show no signs of reducing but continue to grow. A review of policies undertaken by EU member states and the G20 to reduce transport emissions reveals that both present and planned policies focus on binding supply-side measures, but offer only weak demand-side incentives. To address this imbalance, we developed a downstream, demand-side policy prototype through an expert interview design process. We call the prototype “cap-and-surrender” because it caps road emissions, and then allocates tradable emission allowances to individual vehicles that drivers surrender at each fill-up. Allowance pricing, both by the state and in the secondary market, is designed to incentivize decarbonization of the sector. Though the system would require significant investment, its revenue potential to the state should exceed this investment by several multiples. We discuss the potential economic, environmental and social impacts of the policy, as assessed by European transport experts. We find that the approach can deliver significant transport emission reductions in an effective and economically efficient manner. Through the appropriate design of national allocation rules and a gradual phasing in of cap and surrender, potential negative social consequences can be mitigated, and public acceptance of the policy promoted.
Highlights
The European Union aims at net-zero emissions by 2050
Intergroup-comparison based on Kruskal–Wallis; Kruskal–Wallis allows us to detect differences between the stakeholder groups as we expect the assessment of policy impacts to differ between stakeholders. iv
This paper sought to enhance the toolbox of road transport emission policies by designing and assessing a downstream, demand-side approach that we label “cap and surrender” (C&S)
Summary
As laid down in the European Green Deal [1], the EU’s commitment to the Paris Agreement [2] and the 2050 long-term Climate Strategy [3], this requires a comprehensive lowering of greenhouse gas (GHG) emissions across all sectors of the economy to the point where offsetting remaining GHG emissions can occur through natural and technological processes. While overall GHG emissions declined in Europe by 22.5% from 1990 to 2018, total transport emissions increased by more than 23%. Road transport emissions played the leading role in this increase, growing almost 27% over the period and accounting for almost 95% of all transport emissions by 2018. The share of road transport in overall emissions rose from less than 13% in 1990 to almost 21% in 2018 [4]. The principal contributors to these emissions are passenger cars and light-duty vehicles, together responsible for almost 70%
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