Reducing CO2 from cars in the European Union

The European Union (EU) recently adopted CO 2 emissions mandates for new passenger cars, requiring steady reductions to 95 gCO 2 /km in 2021. We use a multi-sector computable general equilibrium (CGE) model, which includes a private transportation sector with an empirically-based parameterization of...

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Bibliographic Details
Published in:Transportation (Dordrecht) 2018-03, Vol.45 (2), p.573-595
Main Authors: Paltsev, Sergey, Henry Chen, Y.-H., Karplus, Valerie, Kishimoto, Paul, Reilly, John, Löschel, Andreas, von Graevenitz, Kathrine, Koesler, Simon
Format: Article
Language:English
Subjects:
Automobiles
Automotive emission standards
Carbon dioxide
Carbon dioxide emissions
Economic Geography
Economic welfare
Economics
Economics and Finance
Electric vehicles
Emission standards
Emissions
Emissions control
Emissions trading
Engineering
Engineering Economics
Expenditures
Impact analysis
Impact strength
Innovation/Technology Management
Logistics
Marketing
Organization
Parameterization
Passengers
Petroleum
Pollution abatement
Regional/Spatial Science
Representations
Transportation
Vehicle emissions
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Summary:The European Union (EU) recently adopted CO 2 emissions mandates for new passenger cars, requiring steady reductions to 95 gCO 2 /km in 2021. We use a multi-sector computable general equilibrium (CGE) model, which includes a private transportation sector with an empirically-based parameterization of the relationship between income growth and demand for vehicle miles traveled. The model also includes representation of fleet turnover, and opportunities for fuel use and emissions abatement, including representation of electric vehicles. We analyze the impact of the mandates on oil demand, CO 2 emissions, and economic welfare, and compare the results to an emission trading scenario that achieves identical emissions reductions. We find that vehicle emission standards reduce CO 2 emissions from transportation by about 50 MtCO 2 and lower the oil expenditures by about €6 billion, but at a net added cost of €12 billion in 2020. Tightening CO 2 standards further after 2021 would cost the EU economy an additional €24–63 billion in 2025, compared with an emission trading system that achieves the same economy-wide CO 2 reduction. We offer a discussion of the design features for incorporating transport into the emission trading system.
ISSN:0049-4488
1572-9435
DOI:10.1007/s11116-016-9741-3