Reducing CO2 from cars in the European Union

Abstract

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 empiricallybased 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.

The Economic, Energy, and Emissions Impacts of Climate Policy in South Korea

“…In some previous studies comparing vehicle standards and cap and trade, a quite large additional cost was incurred when vehicle standards were imposed (Rausch and Karplus, 2014;Paltsev et al, 2016). These studies focussed on costs of standards in the EU and the US, generally for the period up to about 2030, similar to our South Korea study.…”

“…In principle, by broadening the policy to include more sectors, it should reduce the cost, but instead the cost is increasedclear evidence of an inefficiency (partly because of the mechanism itself, and possibly also because the standard is more stringent than it should be). The Paltsev et al (2016) study for the EU imposed the standards on top of a cap that included the transportation sector, a slightly different scenario design. In our comparable scenario, which imposed a cap on the transportation sector instead of the vehicle standards, we get a more similar result to the Paltsev et al (2016) study, with the welfare cost lowered by about 30% compared with controlling emissions from vehicles with vehicle standards.…”

Policies and Predictions for a Low-Carbon Transition by 2050 in Passenger Vehicles in East Asia: Based on an Analysis Using the E3ME-FTT Model

“…Previous studies that have assessed the effectiveness of policy incentives in reducing emissions from passenger vehicles have typically focused on a single country or region in Asia (e.g., [5][6][7][8]). These studies have looked at the effectiveness of taxation schemes (vehicle taxes, carbon taxes) and regulations (fuel economy standards) in shaping the diffusion of energy-efficient vehicles.…”

Development of a CO2 emissions quantification tool for road transport – connecting detailed vehicle simulation and macro emission tools

“…Most manufacturers complied with their 2015 targets already in 2013 and trends show that the 95 gCO 2 /km target could be achieved in 2020. It remains to be seen if the test flexibilities fixed by the WLTP/NEDC Correlation procedure will affect compliance with the CO 2 targets and how [129]. This correlation-induced correction of NEDC emissions is yet to be verified so it has not been considered in the formulation of the scenarios presented below.…”

“…As presented in Figure 20 this is equivalent to a conversion factor of about 1.4-1.5 and would be translated to a target of approximately 100 CO 2 g/km over WLTP. The introduction of WLTP and the WLTPbased target setting should take this into account, together with the available technology options -and the relative costs -for the manufacturers to reach that target, in order to guarantee the effectiveness of the regulation in curbing not only laboratory measured emissions, but also real world ones [128,129].…”