Transport Under Emission Trading: a Computable General Equilibrium Assessment

This book analysis the impact of private road transport under emission trading using two different Computable General Equilibrium models. A static multi-region model with special emphasis on the European Union, addresses the welfare impact of road transport under the European Emission Trading System. Including terms-of-trade effects, this model does not account for congestion which is the main externality of road transport. Furthermore, technological details of electricity generation which are an important factor in evaluating climate policies are not included. Therefore, the second model is a static Small Open Economy model of the German economy including congestion effects and detailed technological characteristics of electricity generation. The results of both models highlight the important role of already existing taxes on transport fuels for the evaluation of carbon mitigation measures in road transportation.