Evaluating policies to reduce greenhouse gas emissions from private transportation

This paper proposes a model system to forecast household greenhouse gas emissions (GHGEs) from private transportation. The proposed model combines an integrated discrete-continuous car ownership model with MOVES 2014. Four modeling components are calibrated and applied to the calculation of GHGEs: vehicle quantity, vehicle type and vintage, miles traveled, and rates of GHGEs. The model is applied to the Washington D.C. Metropolitan Area. Three tax schemes are evaluated: vehicle ownership tax, purchase tax and fuel tax. We calculate that the average GHGEs per vehicle is 5.15 tons of carbon dioxide-equivalent (CO₂E) gases. Our results show that: (a) a fuel tax is the most effective way to reduce vehicle GHGEs, especially for households with fewer vehicles; (b) a purchase tax reduces vehicle GHGEs mainly by decreasing vehicle quantity for households with more vehicles; and (c) an ownership tax reduces vehicle GHGEs by decreasing both vehicle quantity and miles traveled.     

Accelerating the transformation to a low carbon passenger transport system: The role of car purchase taxes,feebates, road taxes and scrappage incentives in the UK

The transition to a low carbon transport world requires a host of demand and supply policies to be developed and deployed. Pricing and taxation of vehicle ownership plays a major role, as it affects purchasing behavior, overall ownership and use of vehicles. There is a lack in robust assessments of the life cycle energy and environmental effects of a number of key car pricing and taxation instruments, including graded purchase taxes, vehicle excise duties and vehicle scrappage incentives. This paper aims to fill this gap by exploring which type of vehicle taxation accelerates fuel, technology and purchasing behavioral transitions the fastest with (i) most tailpipe and life cycle greenhouse gas emissions savings, (ii) potential revenue neutrality for the Treasury and (iii) no adverse effects on car ownership and use.The UK Transport Carbon Model was developed further and used to assess long term scenarios of low carbon fiscal policies and their effects on transport demand, vehicle stock evolution, life cycle greenhouse gas emissions in the UK. The modeling results suggest that policy choice, design and timing can play crucial roles in meeting multiple policy goals. Both CO₂ grading and tightening of CO₂ limits over time are crucial in achieving the transition to low carbon mobility. Of the policy scenarios investigated here the more ambitious and complex car purchase tax and feebate policies are most effective in accelerating low carbon technology uptake, reducing life cycle greenhouse gas emissions and, if designed carefully, can avoid overburdening consumers with ever more taxation whilst ensuring revenue neutrality. Highly graduated road taxes (or VED) can also be successful in reducing emissions; but while they can provide handy revenue streams to governments that could be recycled in accompanying low carbon measures they are likely to face opposition by the driving population and car lobby groups. Scrappage schemes are found to save little carbon and may even increase emissions on a life cycle basis.The main policy implication of this work is that in order to reduce both direct and indirect greenhouse gas emissions from transport governments should focus on designing incentive schemes with strong up-front price signals that reward ‘low carbon’ and penalize ‘high carbon’. Policy instruments should also be subject to early scrutiny of the longer term impacts on government revenue and pay attention to the need for flanking policies to boost these revenues and maintain the marginal cost of driving.     

Petrol expenditure and redistributive effects of its taxation in Spain

The objective of this paper is to estimate a petrol expenditure function for Spain and to evaluate the redistributive effects of petrol taxation. We use micro data from the Spanish Household Budget Survey of 1990/91 and model petrol expenditure taking into account the effect that income changes may have on car ownership levels, as well as the differences that exist between reported expenditure and real consumption during the week of reference. Our results show the importance that household structure, place of residence and income have on petrol expenditure patterns. We are able to compute income elasticities of petrol expenditure, both conditional and unconditional on the level of car ownership. Non-conditional elasticities, while always very close to unit values, are lower for higher income households and for those living in rural areas or small cities. When car ownership levels are taken as fixed, the conditional elasticity obtained is around one half the value of the non-conditional ones. As regards the redistributive effects of petrol taxation, we observe that for the lowest income deciles the share of petrol expenditure increases with income, and thus the tax can be regarded as progressive. However, after a certain income level the tax proves to be regressive.     

How much should gasoline be taxed when electric vehicles conquer the market? An analysis of the mismatch between efficient and existing gasoline taxes under emerging electric mobility

The taxation of gasoline is characterized by large variability across countries and recent research has analyzed existing gasoline tax levels from an economic efficiency point of view focusing on conventional internal combustion engine vehicles. Most studies find that existing fuel tax rates do not coincide with economically efficient levels. As long as policymakers do not take action to reduce the resulting efficiency gap, there will be an ongoing welfare loss to the economy. However, the composition of passenger car fleets will probably be subject to fundamental changes in the (near) future due to the emergence of electric mobility. This raises the question of whether the mismatch between current and efficient fuel taxation will persist, shrink, or even exacerbate under emerging electric mobility. This paper aims at answering this question by determining the structure and level of optimal gasoline taxes in the presence of electric vehicles (EVs). First, the optimal (nationwide) gasoline tax is analytically derived employing a general equilibrium approach. It is shown that differences in traffic related marginal external costs among fuel powered cars and EVs affect the corrective Pigouvian component of the optimal gasoline tax while a differential tax treatment influences the fiscal rational of the tax. Second, the model is applied to Germany using differentiated data on e.g. external costs and behavioral responses. Under a wide range of scenarios, the present analyses indicate a strong relationship between optimal gasoline taxes and electric mobility, calling for a downward adjustment of efficient gasoline taxes. The effect is mainly driven by financial incentives for purchasing and using EVs. Since fuel is likely to be undertaxed in many countries, the emergence of electric mobility will therefore close the gap between gasoline taxes in place and economically efficient taxes. On the other side, it will increase the efficiency gap in those countries where gasoline is overtaxed. This also has important implications for policy concerned with environmental objectives. Pushing electric mobility seriously and at the same time taxing gasoline efficiently could actually prevent sufficient CO₂ emission savings. However, at least in the case of Germany, even a downward adjusted optimal gasoline tax under electric mobility is likely to be higher than the current (non-optimal) tax.     

Impacts of an emission based private car taxation policy - First year ex-post analysis

This paper assesses the impacts of a targeted policy designed to influence car purchasing trends towards lower CO₂ emitting vehicles. Vehicle registration tax and annual motor tax rates in Ireland changed in July 2008 from being based on engine size to emissions performance of cars. This paper provides a one year ex-post analysis of the first year of the tax change, tracking the change in purchasing trends arising from the measure related to specific CO₂ emissions, engine size and fuel, and the implications for car prices, CO₂ emissions abatement, and revenue gathered. While engine efficiency improvements had been offset by purchasing trends towards larger and generally less efficient cars in the past, with the average MJ/km remaining constant from 2000 to 2007, this analysis shows that in the first year of the new taxation system the average specific emissions of new cars fell by 13% to 145 g/km. This was brought about, not by a reduction in engine size, but rather through a significant shift to diesel cars. Despite an unexpected reduction in car sales due to a recession in 2008, the policy measure has had a larger than anticipated impact on CO₂ emissions, calculated to be 5.9 ktCO₂ in the first year of the measure. The strong price signal did however result in a 33% reduction in tax revenue from VRT, in financial terms amounting to a drop of €166 million compared to a baseline situation.     

Six years of CO2-based tax incentives for new passenger cars in The Netherlands: Impacts on purchasing behavior trends and CO2 effectiveness

There is growing evidence that consumers respond more effectively to upfront price signals, such as vehicle purchase taxes and feebate policies, and to tax incentives that are more salient than others, such as company car taxes graded by CO₂ emissions. This paper examines tax changes in The Netherlands, which are among the most stringent and most salient in Europe, and assesses the ex-post purchasing impacts and CO₂ effectiveness of six years of CO₂-based tax incentives for low-carbon cars in The Netherlands. Dutch tax incentives resulted in 13 g/km, or 11% lower average CO₂ emissions in 2013. The Netherlands has moved from the 12th position before the tax changes in 2007 to become Europe’s number one in terms of the lowest average new car CO₂ emissions and highest share of electric vehicles in 2013. Tax incentives for new cars sold between 2008 and 2013 have resulted in 4.6 million tons of potential lifetime CO₂ abatement at the cost of a drop in tax revenues of 30–50%. However, when corrected for the Dutch policy-induced increasing real-world fuel-economy shortfall and leakage of carbon reduction potential through vehicle export of low-carbon cars, only 3.5 million tons or 75% of the CO₂ reduction remains. CO₂-based tax incentives for company cars seem to have contributed the most to the observed turnaround in purchasing behavior towards lower CO₂-emitting passenger cars.     

Institutional constraints on transport policymaking: the case of company cars in Israel

Transportation analysis emphasizes the necessity to internalize the transport externalities of car usage through taxation. Yet taxation decisions are often made with non-transport goals in mind. In such cases, transport policies are made ‘by the way.’ This paper examines such a case: Israel’s taxation policy on company cars. It shows that current taxation policies result in increasing numbers of company cars and growing numbers of transport users who are not sensitive to the marginal cost of car use and make excessive use of the car. As a result, a significant portion of Travel Demand Management (TDM) measures cannot affect this group. The Israeli case of company car tax reform demonstrates the problematic effect of a policy that does not take its overall consequences on other policy fields into account and thereby impairs efforts to reduce the negative impacts of the transport system. Also, it demonstrates the importance of institutional aspects of transport policymaking.

A dynamic model system of household car ownership,trip generation,and modal split: model development and simulation experiment

A dynamic model of household car ownership and mode use is developed and applied to demand forecasting. The model system consists of three interrelated components: car ownership, mechanized trip generation, and modal split. The level of household car ownership is represented as a function of household attributes and mobility measures from the preceding observation time point using an ordered-response probit model. The trip generation model predicts the weekly number of trips made by household members using car or public transit, and the modal split model predicts the fraction of trips that are made by public transit. Household car ownership is a major determinant in the latter two model components. A simulation experiment is conducted using sample households from the Dutch National Mobility Panel data set and applying the model system to predict household car ownership and mode use under different scenarios on future household income, employment, and drivers’ license holding. Policy implications of the simulation results are discussed.     

The Contribution of Benefit-in-Kind Taxation Policy in Britain to the ‘Peak Car’ Phenomenon

Car use per person has historically grown year-on-year in Great Britain since the 1950s, with minor exceptions during fuel crises and times of economic recession. The ‘Peak Car’ hypothesis proposes that this historical trend no longer applies. The British National Travel Survey provides evidence of such an aggregate levelling off in car mileage per person since the mid-1990s, but further analysis shows that this is the result of counter trends netting out: in particular, a reduction in per capita male driving mileage being offset by a corresponding increase in female car driving mileage. A major contributory factor to the decline in male car use has been a sharp reduction in average company car mileage per person. This paper investigates this aspect in more detail. Use of company cars fell sharply in Britain from the 1990s up to the 2008 recession. Over the same period, taxation policy towards company cars became more onerous, with increasing levels of taxation on the benefit-in-kind value of the ownership of a company car and on the provision of free fuel for private use. The paper sets out the changes in taxation policy affecting company cars in the UK, and looks at the associated reductions in company car ownership (including free fuel) and patterns of use. It goes on to look in more detail at which groups of the population have kept company cars and in which parts of the country they have been most used, and how these patterns have changed over time. A preliminary investigation is also made of possible substitution effects between company car and personal car driving and between company car use and rail travel. Clearly, the role of the company car is only one of many factors that are contributing to aggregate changes in levels of car use in Great Britain, alongside demographic changes and a wide range of policy initiatives. But, company car use cannot fall below zero, so the effect of declining year-on-year company car mileage suppressing overall car traffic levels cannot continue indefinitely.     

Should BEVs be subsidized or taxed? A European perspective based on the economic value of CO2 emissions

Battery Electric vehicles (BEVs) are generally considered as potentially contributing to the reduction of CO₂ emissions. Consequently, many countries have promoted (or are in the process of promoting) policies aimed at directly or indirectly subsidizing BEVs to accelerate their market uptake. The aim of this paper is to assess whether BEVs’ subsidies are justified (and by what amount) with reference to the carbon component, distinguishing by car segments and countries. To address these research questions, a simulation model is developed, based on the most recent and reliable data available. The model estimates and monetizes the Well-to-Wheel CO₂ emissions of six car segments in 28 European countries. The monetary value of the difference of the CO₂ emissions between the non-BEVs and the BEVs ranges from −€1133 (tax) to +€3192 (subsidy), depending on the car segment and on the nation considered. These results are then compared to the policies about alternative fuels adopted by the single EU countries, suggesting in some cases the necessity to rethink such incentives.     

On a pathway to de-carbonization – A comparison of new passenger car CO2 emission standards and taxation measures in the G20 countries

Considering the role of transport for a 1.5 Degree stabilization pathway and the importance of light-duty vehicle fuel efficiency within that, it is important to understand the key elements of a policy package to shape the energy efficiency of the vehicle fleet. This paper presents an analysis focusing on three types of policy measures: (1) CO₂ emission standards for new vehicles, (2) vehicle taxation directly and indirectly based on CO₂ emission levels, and (3) fuel taxation. The paper compares the policies in the G20 economies and estimates the financial impact of those policies using the example of a Ford Focus vehicle model. This analysis is a contribution to the assessment of the role of the transport sector in global decarbonisation efforts. The findings of this paper show that only an integrated approach of regulatory and fiscal policy measures can yield substantial efficiency gains in the vehicle fleet and can curb vehicle kilometres travelled by individual motorised transport. Using the illustrative example of one vehicle model, the case study analysis shows that isolated measures, e.g. fuel efficiency regulation without corresponding fuel and vehicle taxes only have minor CO₂ emission reduction effects and that policy measures need to be combined in order to achieve substantial emission reduction gains over time. The analysis shows that the highest level of impact is achieved by a combination regulatory and fiscal policies rather than only one policy even if this policy is more aggressive. When estimating the quantitative effect of fuel efficiency standards, vehicle and fuel tax, the analysis shows that substantial gains with regard to CO₂ emission are only achieved at a financial impact level above 500 Euros over a four year period.     

Changing household car ownership level and life cycle events: an action in anticipation or an action on occurrence

This paper analyzes households’ decision to change their car ownership level in response to actions/decisions regarding mobility issues and other household events. Following recent literature on the importance of critical events for mobility decisions, it focuses on the relationship between specific events (e.g. childbirth and buying an extra car), rather than trying to explain the status of car ownership from a set of stationary explanatory variables. In particular, it is hypothesized that changes in household car ownership level take place in response to stressors, resulting from changed household needs or aspirations. The study includes a broad range of events. Apart from changes in work status, employer and residential location, it analyzes demographic events such as household formation and childbirth. Also, it scrutinizes the temporal sequence in which chains of related events are most likely to occur. To this end, data from a retrospective survey that records respondents’ car ownership status, as well as residential and household situation over the past 20 years are used. A panel analysis has been carried out to disentangle typical relationships. The results suggest that strong and simultaneous relationships exist between car ownership changes and household formation and dissolution processes. Childbirth and residential relocation invoke car ownership changes. Changes are also made in anticipation of future events such as employer change and childbirth. Childbirth is associated with increasing the number of cars, whereas the effect of employer change goes the opposite way. Job change increases the probability of car ownership change in the following year.     

Estimating the long-term effects of different passenger car technologies on energy/fuel consumption and emissions of greenhouse gases in Europe

Abstract

A stated preference (SP) experiment of car ownership was conducted in Mumbai Metropolitan Region (MMR) of Maharashtra in India. A full factorial experiment was designed to considering various attributes such as travel time, travel cost, projected household income, car loan payment and servicing cost. Data on 357 individuals were collected which resulted in 3213 observations for the calibration of the work trip and recreational trip car ownership models. The car ownership alternatives considered 0, 1 and 2 cars. A multinomial logit framework was used to develop the car ownership model taking the household as a decision unit. The specification and results of the SP car ownership model are discussed. The observed and predicted values matched reasonably when the validity of the SP car ownership model was tested against revealed preference (RP) data. The car ownership models developed in this study exhibit a satisfactory goodness of fit. It is concluded that the SP modelling approach can be successfully used for modelling car ownership decisions of households in developing countries.     

A welfare cost assessment of various policy measures to reduce pollutant emissions from passenger road vehicles

Policy options to reduce passenger transport emissions in Europe are simulated with the EUCARS model. The EUCARS welfare analysis includes changes in consumer surplus, congestion and tax revenues. Simulations also address consumer myopia, i.e., the underestimation of fuel costs by car buyers. The best policy mix to reduce CO₂ consists of fuel taxes that are combined with differentiated purchase taxes to correct for the assumed myopia. This combination could reduce CO₂ emissions of over 25% without reducing contemporaneous well-being. For the reduction of conventional emissions, an equivalent best mix includes an emissions-based kilometre tax combined with a purchase feebate. This mix allows a 60% reduction in toxic emissions without any noticeable welfare reduction. The overall superiority of these two mixes compared to alternative choices is higher when the evaluation includes a broad group of externalities, a premium on public funds, and positive feedbacks across emissions categories. Local traffic management measures are important zero-cost complements for an overall emissions strategy.     

Influences of car type class and carbon dioxide emission levels on purchases of new cars: A retrospective analysis of car purchases in Norway

The impact of socio-demographic and psychological factors on purchases of new cars is examined. Data were gathered in an online retrospective survey using a sample of 198 Norwegian households who purchased a new car in December 2010. A latent class analysis was performed to identify car type classes followed by a path analysis to investigate the determinants of the purchased car type class and the influence on the purchased car’s level of carbon dioxide emissions. The results revealed that car type class is the strongest determinant of the car’s level of CO₂ emissions. Socio-demographic factors have little impact on choice of car type class when psychological factors are controlled for. Intention to purchase an environmentally friendly car has a direct effect on the car’s CO₂ emissions.     

Changes in level of household car ownership: the role of life events and spatial context

Recent longitudinal studies of household car ownership have examined factors associated with increases and decreases in car ownership level. The contribution of this panel data analysis is to identify the predictors of different types of car ownership level change (zero to one car, one to two cars and vice versa) and demonstrate that these are quite different in nature. The study develops a large scale data set (n = 19,334), drawing on the first two waves (2009–2011) of the UK Household Longitudinal Study (UKHLS). This has enabled the generation of a comprehensive set of life event and spatial context variables. Changes to composition of households (people arriving and leaving) and to driving licence availability are the strongest predictors of car ownership level changes, followed by employment status and income changes. Households were found to be more likely to relinquish cars in association with an income reduction than they were to acquire cars in association with an income gain. This may be attributed to the economic recession of the time. The effect of having children differs according to car ownership state with it increasing the probability of acquiring a car for non-car owners and increasing the probability of relinquishing a car for two car owners. Sensitivity to spatial context is demonstrated by poorer access to public transport predicting higher probability of a non-car owning household acquiring a car and lower probability of a one-car owning household relinquishing a car. While previous panel studies have had to rely on comparatively small samples, the large scale nature of the UKHLS has provided robust and comprehensive evidence of the factors that determine different car ownership level changes.     

National policy towards cars: Greece

Passenger car ownership and use in Greece has been a matter of serious consideration at government level, only in the last decade with the increasing traffic congestion in the big cities. However, government policy towards private car ownership has always been influenced by two main factors.

First, that virtually all vehicles have to be imported, a fact which has a serious balance of payments implication for a small country like Greece.

Second, the traditional heavy taxation of motor vehicles and fuel, brings high revenues for the national budget. Recently a third consideration has been added, that of energy consumption and of the environmental effects of car use.

From the point of view of car owners, ownership was originally seen as a means of social recognition and establishment, but for the last decade it has been considered mainly as an everyday necessity more or less imposed on one, by a number of other well accepted facts of everyday social and professional life.

Influenced by the two main factors above; private car ownership and use in Greece has developed for the last two decades at a pace similar to but not the same as in other Western Countries. In this paper the existing situation and prospects will be examined and comments made on the peculiarities characterizing the Greek scene.     

Examining the effects of the built environment and residential self-selection on commuting trips and the related CO2 emissions: An empirical study in Guangzhou,China

Numerous studies have established the link between the built environment and travel behavior. However, fewer studies have focused on environmental costs of travel (such as CO₂ emissions) with respect to residential self-selection. Combined with the application of TIQS (Travel Intelligent Query System), this study develops a structural equations model (SEM) to examine the effects of the built environment and residential self-selection on commuting trips and their related CO₂ emissions using data from 2015 in Guangzhou, China. The results demonstrate that the effect of residential self-selection also exists in Chinese cities, influencing residents’ choice of living environments and ultimately affecting their commute trip CO₂ emissions. After controlling for the effect of residential self-selection, built environment variables still have significant effects on CO₂ emissions from commuting although some are indirect effects that work through mediating variables (car ownership and commuting trip distance). Specifically, CO₂ emissions are negatively affected by land-use mix, residential density, metro station density and road network density. Conversely, bus stop density, distance to city centers and parking availability near the workplace have positive effects on CO₂ emissions. To promote low carbon travel, intervention on the built environment would be effective and necessary.     

Assessment of an eastern European city's public transport system

The paper examines the present quality of public transport services in Budapest and compares that to the impact of growing car ownership. A review is made of the city's transport plans and future investment proposals and these are assessed in light of public transport's present and likely future competitive position compared to private cars. The paper concludes that much of the proposed investment in a metro system will not maintain public transport's competitive position in the face of rising car ownership and that other measures and investments might be more effective.     

A causal analysis of car ownership and transit use

The causal structure underlying household mobility is examined in this study using a sample obtained from the Dutch National Mobility Panel survey. The results indicate that car ownership is strongly associated with mode use, but that it has no influence on weekly person trip generation by household members. Characteristics of mode use are examined through a causal analysis of changes in car ownership, number of drivers, number of car trips, and number of transit trips. It is shown that observed changes in mode use cannot be adequately explained by assuming that a change in transit use influences car use. The finding suggests that the increase in car use, which is a consequence of increasing car ownership, may not be suppressed by improving public transit.