Tradable mobility credits for long-distance travel in Europe

Abstract

There is an urgent need to devise policy instruments that will reduce GHG emissions to a sufficient extent in order to achieve the climate targets. Approximately 16% of all greenhouse gas emissions are generated by long-distance travel. Our objective is to estimate the impact of a Tradeable Mobility Credit (TMC) scheme − where the total emissions are fixed by design whereas the price is the outcome of travelers’ choices − will have on modal split and trip cancellation for long-distance leisure travel in Europe. To this end, we develop a market equilibrium model which accounts for travel and trading decisions. For our case study consisting of a travel demand of more than 300 million trips performed annually between 3,000 city-pair connections, the credit price that emerges in the market equilibrium state is 272€ per ton of CO2 under an emission reduction target of 30%. Due to the TMC, overall long-distance leisure travel demand is reduced by 20% and the share of air among the remaining trips decreases from 50 to 42% whereas the market share of rail increases from 23 to 26%. Modal shifts and trip cancellation rates vary greatly amongst OD-pair connections, depending on the local value-of-time and the extent of modal competition for the respective connection. Our findings contribute to the on-going debate surrounding instruments for stimulating sustainable (im)mobility, in particular in the context of the long-distance travel market.