Abstract

http://ssrn.com/abstract=1844300
 
 

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Private Transport and the European Emission Trading System: Revenue Recycling, Public Transport Subsidies, and Congestion Effects


Jan Abrell


ETH Zurich

May 17, 2011


Abstract:     
From 2012 onwards, the European Emission Trading System regulates the carbon emissions of electricity generation, refineries, energy intensive production, and aviation. Beside the fuel efficiency regulation of cars, there exists no European approach of carbon regulation in the private transport sectors. However, half of the income of allowance auctioning has to be used for implementing environmental improving policies including public transport subsidies. Using a Computable General Equilibrium model of the German economy, we show that exempting transport from carbon pricing but recycling revenues via public transport subsidies is welfare enhancing. By including congestion effects into the model we show that such a recycling scheme has the potential of negative gross cost of carbon regulation by reducing congestion and global pollution externalities.

Number of Pages in PDF File: 22

Keywords: Transport, carbon regulation, European emission trading system, public transport

JEL Classification: D58, H23, Q58, R41

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Date posted: May 24, 2011  

Suggested Citation

Abrell, Jan, Private Transport and the European Emission Trading System: Revenue Recycling, Public Transport Subsidies, and Congestion Effects (May 17, 2011). Available at SSRN: http://ssrn.com/abstract=1844300 or http://dx.doi.org/10.2139/ssrn.1844300

Contact Information

Jan Abrell (Contact Author)
ETH Zurich ( email )
Zürichbergstrasse 18
Zurich, 8032
Switzerland
HOME PAGE: http://www.janabrell.de
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