Quantifying Impacts of Transport-Related CO2 Abatement Policies

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Quantifying Impacts of Transport-Related CO2
Abatement Policies

• Roundtable on Transport - Related Climate Change
  Problems
• OECD Environment Directorate and International
  Energy Agency
• Paris, 18th February 2000
• John DodgsonNational Economic Research
  Associates
• n/e/r/a

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Structure of this presentation

• 1. Introduction objectives and structure
• 2. The issues that need to be considered
• 3. The main policy options
• 4. Developing policy packages France, the
  Netherlands, the UK
• 5. Overall conclusions
• 5.i Policy packages
• 5.ii Quantification

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The issues that need to be considered

• 1. Measuring existing carbon emissions from the
  transport sector
• 2. Understanding the way in which these emissions
  are generated
• 3. Forecasting emissions in a Business as Usual
  (BAU) case
• 4. Identifying specific policy options to limit
  carbon emissions below the levels they would
  reach in the BAU case
• 5. Quantifying the impact of particular options
  both individually, and when combined in policy
  packages
• 6. Assessing whether particular policies can be
  implemented for practical reasons

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The main policy options (I)

• 1. Economic instruments
• Increases in fuel taxes
• Road congestion charging
• Feebates
• Other fiscal measures
• 2. Regulations and guidelines
• Speed limits
• Traffic management measures
• Land use regulations and guidelines

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The main policy options (II)
3. Voluntary agreements and actions ECMT/
vehicle manufacturing industry joint
declaration European Commission/ACEA 1998
agreement 4. Information and training
initiatives Consumer fuel-economy information
initiative Driver training 5. Research and
development
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Developing policy packages

• France
• Sectoral groups of experts produced
  recommendations. Ministerial meeting on 19th
  January 2000
• Netherlands
• Option document. Policy document. Independent
  evaluation. Monitoring
• United Kingdom
• Consultation Document (October 1998). Responses
  (August 1999). Policy report (February 2000?)

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Policy example (1) increases in fuel duty
The UK Fuel Duty Escalator 1993-1999
Real value of fuel duty to be increased by at
least a fixed percentage every year up to
2002.1993 3 1993-1997 5 1997-1999 6
Index (1990 100)
Current prices petrol index (1990 100)
Real petrol price index (1990 100)
Year
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The UK fuel duty escalator

• Expected impacts
• Mileage driven per vehicle
• Total vehicle stock
• New cars consumers choice of vehicle
• New cars manufacturers decisions about
  technological characteristics of new
  cars
• Second round effects on annual kms driven
  (rebound effects)
• Vehicle retirement decisions
• Main quantification approaches
• Simple elasticity models
• Disaggregated vehicle stock models

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A disaggregated vehicle stock model the UK
vehicle market model
Base Year
vintages
cc
Car Stock
sb
x
cc
Annual km per Vehicle
sb total car stock in base year
x
cc
Fuel Consumption (Litres/km)
? base year fuel consumption
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Policy example (2) feebates (the Netherlands)

• Car purchasers pay a fee or receive a rebate
  based on the relationship between the car fuel
  consumption and the zero point
• Quantification based on work for the US
  Department of Energy by Kenneth Train and others
• The problem is to predict car purchase responses
  in the face of changed costs
• US work used a nested logit model (household
  choice of number and types of cars to own)

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New car purchases a critical modelling task
Year on Year Survival Matrix
Base Year
Forecast Year
vintages
vintages
cc
cc

x
new car purchases
sb
sf
x
x
cc
cc
sb total car stock in base year
sf total car stock in forecast year
x
x
cc
cc
new car fuel consumption
? base year fuel consumption
? forecast year fuel consumption
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Policy example (3) reduction/enforcement of speed
limits

• Quantification issues
• 1. Measurement of existing traffic speeds
• 2. Assessment of how reduction in speeds reduces
  fuel consumption per km

Fuel Consumption (Litres/km)
Speed (km/hour)
b
a
3. Assessment of effectiveness of
enforcement 4. Second-round effects (see
Netherlands study by Peeters et al)
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Policy example (4) the EU/ACEA voluntary agreement

• Achieve an average CO2 emissions figure of
  140g/km by 2008 for all new cars sold in EU
• Market individual models of cars with CO2
  emissions of 120g/km or less by 2000
• Indicative intermediate target of 165-170 g/km in
  2003 as a basis for monitoring progress
• Review potential for additional improvements -
  with a view to moving the car fleet average
  further towards 120g/km by 2012

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Assessing the impact of the voluntary agreement
Year on Year Survival Matrix
Base Year
Forecast Year
vintages
vintages
cc
cc

x
new car purchases
sb
sf
x
x
cc
cc
sb total car stock in base year
sf total car stock in forecast year
x
x
cc
cc
new car fuel consumption
? base year fuel consumption
? forecast year fuel consumption
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Issues with the voluntary agreement

• Will manufacturers achieve the improvements in
  technology?
• Can they agree on how the savings are achieved
  between them?
• Will consumers choose to purchase the right
  vehicles?
• Will reductions in cost per km lead to a rebound
  effect on kms run?
• Clear importance of effective monitoring

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Overall conclusions policy packages

• 1. Importance of non-car measures (dont treat as
  an afterthought)
• 2. Scope for improvement in fuel efficiency of
  public transport
• 3. Non-petroleum-based modes should be considered
• 4. Mix of types of option will reflect national
  approaches to policy issues
• 5. Construction of packages of measures will be a
  complex iterative process, with inevitable delays
• 6. Importance of technological measures to reduce
  new car fuel consumption - the voluntary
  agreement - the need for an early warning
  system
• 7. Do not delay implementation of other measures

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Overall conclusions quantification

• 1. Need for transparency in the explanation of
  how the impacts of different policies have been
  quantified
• 2. Value of independent evaluation of national
  plans
• 3. Need for a clear definition of what BAU
  scenarios imply
• 4. Danger of double counting within policy
  packages
• 5. Need to draw on existing models
• 6. Value of disaggregate vehicle stock models
• 7. Need for care in taking account of rebound
  effects
• 8. Important role for ex post evaluation of
  policy measures
• 9. Value of sharing experience of quantification
  internationally