Decreasing transport emissions in the EU : A GAINS analysis of policies for reduced emissions from European transport

This paper analyzes the use of market-based emission regulation instruments to address the carbondioxide emissions of transportation. Simulations with an on-line model for evaluating GHG emissionsshow that a tax based approach does not grant European emission goals for the transport sector. Byanalyzing abatement cost curves generated by the model, this thesis investigates the effects ofincluding road transport in the EU ETS after the third trading phase. It stresses that the argumentsand worries brought up not to include transportation to ETS are not sufficient in the year 2020. Thethesis suggests that including transportation into the European emission trading scheme after thethird trading phase is superior to a continued tax-based approach. Furthermore, it is stressed that theefficient part of a tax-based approach, namely increased use of bio fuels, can be reached using aquota requirement in combination with an inclusion of transportation to a trading scheme