Transport sector policies already contribute to moderating greenhouse gas emissions from road vehicles. They are increasingly designed to contribute overall societal targets to mitigate climate change. While abatement costs in transport are relatively high, there are plausible arguments in favour of further abatement in this sector.
Fuel taxes are a good instrument. Fuel economy standards are potentially justified because of the limited performance of markets in terms of improving fuel economy. The empirical basis to decide upon combinations of fuel economy standards and fuel taxes, however, remain weak.
This Round Table investigates the effectiveness and costs of various mitigation options in road transport, and discusses the distribution of abatement efforts across sectors of the economy.
Link: The Cost and Effectiveness of Policies to Reduce Vehicle Emissions (Summary and Conclusions)