A Regression on Climate Policy - The European Commission's Proposal to Reduce CO2 Emissions from Transport

23 Pages Posted: 13 May 2008

See all articles by Manuel Frondel

Manuel Frondel

RWI Leibniz Institute for Economic Research ; Ruhr University Bochum (RUB)

Christoph M. Schmidt

RWI - Leibniz-Insitut für Wirtschaftsforschung (RWI Essen); Ruhr-Universität Bochum (RUB); Institute for the Study of Labor (IZA); Centre for Economic Policy Research (CEPR)

Colin Vance

Rheinisch-Westfälisches Institut für Wirtschaftsforschung (RWI)

Date Written: April 2008

Abstract

As part of its efforts to reach the targets of the Kyoto Protocol, the European Commission is currently considering a new directive to reduce the per-kilometer CO2 emissions of newly registered automobiles. This paper critically assesses this proposal with respect to its economic and technological underpinnings. We argue that the proposal's reliance on targets based on per-kilometer emissions not only conceals the true costs of compliance and thereby stifles informed public discourse, but is also less cost-effective than alternative measures such as emissions trading.We further examine the proposal's underlying assumptions, finding that these misrepresent the current state of automotive technology and therefore may overestimate the feasibility of achieving the suggested emissions targets. Alternative targets are consequently proposed that are argued to more accurately reflect the industry's technological evolution to date.

Keywords: Technological progress, private automobiles, efficiency standards

JEL Classification: L98, Y10

Suggested Citation

Frondel, Manuel and Schmidt, Christoph M. and Vance, Colin, A Regression on Climate Policy - The European Commission's Proposal to Reduce CO2 Emissions from Transport (April 2008). Ruhr Economic Paper No. 44. Available at SSRN: https://ssrn.com/abstract=1132778 or http://dx.doi.org/10.2139/ssrn.1132778

Manuel Frondel (Contact Author)

RWI Leibniz Institute for Economic Research ( email )

Hohenzollernstr. 1-3
45128 Essen
Germany

Ruhr University Bochum (RUB) ( email )

Universitätsstraße 150
Bochum, NRW 44780
Germany

Christoph M. Schmidt

RWI - Leibniz-Insitut für Wirtschaftsforschung (RWI Essen) ( email )

Hohenzollernstraße 1-3
Essen, 45128
Germany
++49 201 8149-227 (Phone)
++49 201 8149-236 (Fax)

Ruhr-Universität Bochum (RUB)

GC 2/150
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D-44780 Bochum
Germany

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Colin Vance

Rheinisch-Westfälisches Institut für Wirtschaftsforschung (RWI) ( email )

Hohenzollernstr. 1-3
Essen, 45128
Germany
0049-201-8149-237 (Phone)

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