Regulating CO2 Emissions of Transportation in Europe: A CGE-Analysis Using Market-Based Instruments

14 Pages Posted: 14 Jun 2009

See all articles by Jan Abrell

Jan Abrell

affiliation not provided to SSRN

Date Written: June 11, 2009

Abstract

This paper analyzes the use of market-based emission regulation instruments to address the carbon dioxide emissions of transportation. Simulations with a static multi region computable general equilibrium model show that including transportation into the European emission trading system is superior to a closed emission trading system for transportation or a tax-based approach. Furthermore, we show that exempting transportation from emission regulation is the most favorable approach in terms of welfare. This result is due to a large tax interaction effect caused by high pre-existing fuel taxes in the transport sector.

Keywords: Transportation, Carbon Regulation, Emission Trading, Computable General Equilibirum

JEL Classification: D58, L91, Q51

Suggested Citation

Abrell, Jan, Regulating CO2 Emissions of Transportation in Europe: A CGE-Analysis Using Market-Based Instruments (June 11, 2009). Available at SSRN: https://ssrn.com/abstract=1418008 or http://dx.doi.org/10.2139/ssrn.1418008

Jan Abrell (Contact Author)

affiliation not provided to SSRN

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