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GTAP Resource #5855

"Policy Instrument Choice with Co-Benefits: The Case of Decarbonizing Transport"
by Landis, Florian and Sebastian Rausch

This paper examines alternative regulatory strategies for decarbonizing private transportation in the presence of congestion co-benefits. To capture the behavioral responses of heterogeneous households to regulation and consistently value the monetary and time costs of commuting, we integrate (1) spatial household-level data on the location of residence and work, (2) road network and traffic data from Google, and (3) household survey data on expenditure and income into a dynamic general equilibrium model which features pre-existing fuel taxes and technology choice between internal combustion engine and electric vehicles.
Ignoring co-benefits, an emissions intensity standard outperforms carbon pricing because it is a smaller implicit tax on factors of production. With co-benefits, carbon pricing yields aggregate efficiency gains. Moreover, only high-income households with short- to medium-distance commutes or low congestion exposure prefer a standard over carbon pricing. Under both policies, low-income households with long commutes incur the largest costs. Our analysis suggests that carbon pricing, along with targeted measures to alleviate the burden for low-income households, can be an efficient and equitable instrument for decarbonizing private transport.

Resource Details (Export Citation) GTAP Keywords
Category: 2019 Conference Paper
Status: Published
By/In: Presented at the 22nd Annual Conference on Global Economic Analysis, Warsaw, Poland
Date: 2019
Created: Landis, F. (4/15/2019)
Updated: Landis, F. (6/17/2019)
Visits: 1,015
- Climate change policy
- Technological change
- Europe (Western)

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