Journal
TRANSPORTATION RESEARCH PART D-TRANSPORT AND ENVIRONMENT
Volume 15, Issue 4, Pages 235-239Publisher
PERGAMON-ELSEVIER SCIENCE LTD
DOI: 10.1016/j.trd.2010.02.002
Keywords
Transportation; Carbon regulation; Emission trading; Computable general equilibrium
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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 counterintuitive result is due to a large tax-interaction effect caused by high pre-existing fuel taxes in the transport sector. (C) 2010 Elsevier Ltd. All rights reserved.
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