A system of tradable CO2 permits applied to fuel consumption by motorists

Abstract

Decentralized transferable permit systems in the transport sector can be of interest with regard to reducing greenhouse gas emissions, in spite of anticipated transaction costs. This paper describes a potential application of a domestic market for car fuel consumption permits. The marginal costs of consumption reduction vary sufficiently according to motorists' residential locations to consider permit exchanges. Economic evaluation of this system shows that there are transfers of surplus between the various groups of motorists according to their residential locations. The central government may lose significant revenues when compared with a conventional fuel tax. Lastly, the issue of transaction costs, the benefits and disadvantages in terms of social acceptability and equity are discussed. AcknowledgementsThis paper is based on a research conducted with the support of the CNRS (Centre National de la Recherche Scientifique) and funded by the French Ministry of the Environment. We would also like to thank our colleague Dominique Bouf for his helpful comments on an earlier version of this paper. However views expressed here are solely the authors' ones.

Behavioural effects of a tradable driving credit scheme: Results of an online stated adaptation experiment in the Netherlands

“…Goddard (1999) proposed replacing the Mexico City non-driving-day vehicle restriction scheme with a more flexible tradable driving-day scheme. Examples of other proposals include mobility rights to drive in specific tolled areas and to ride public transport (Viegas, 2001), tradable fuel credits (Raux and Marlot, 2005;Crals et al, 2003) and, inspired by airport slot-allocation approaches, tradable road access rights (Buitelaar et al, 2007). For an elaborate review on various TC proposals in the transport domain, we refer to GrantMuller and Xu (2014) and Fan and Jiang (2013).…”

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Americans’ Contributions to Climate Change: Opportunities for Meeting Carbon Targets

“…This approach would make GHG targets, allowances and trading far more obvious to individual consumers, while addressing various equity issues inherent in alternative policies. Raux and Marlot (2005) hypothesized that such a system could be seen as an alternative to yet another tax, and thus more acceptable to the public. Moreover, since it would apply at the level of individuals (not just businesses), it may receive solid private sector support.…”

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