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At the TRAN meeting which took place earlier this week in Brussels, CE Delft presented a new study prepared for the European Parliament on the pricing instruments on transport emissions.  The study provides an overview of the different pricing instruments on road transport CO2 emissions that are currently used in the EU, the main developments that are expected in this field and the impacts these instruments may have on the transport sector and society in general.

The report highlights that pricing instruments on road transport CO2 emissions are extensively applied in Europe, but there are significant differences between Member States.  The report makes a number of policy recommendations to optimise the use of pricing instruments in decarbonising the road transport sector,  including the following:

• Develop a balanced mix of pricing instruments. Fuel taxes and/or an ETS would be the cornerstone(s) of an effective package of pricing instruments on CO2 emissions. However, CO2 based purchase taxes may provide an effective additional incentive for the uptake of low- and zero-emission vehicles.
• Integrate pricing instruments in a broader package of CO2 reduction policies. As pricing instruments are largely complementary to other climate policies, like CO2 vehicle standards, they should be preferably combined in an overall climate policy for (road) transport.
• Consider political and social acceptance of pricing instruments. Large distributional impacts may negatively affect the political and social acceptance of pricing instruments. Developing mitigation measures for these impacts is therefore key, e.g. by designing effective recycling channels for the revenues of pricing instruments.
• Regularly re-adjust the pricing instruments. In order to maintain the effectiveness and revenue of pricing instruments, regular updates of CO2 based pricing instruments are required, taking trends in the car industry (e.g. decreasing average CO2 emissions of vehicles) and consumer preferences (e.g. increased preferences for zero-emission vehicles) into account.
• Consider other transport externalities as well. An overall transport pricing policy should not only consider CO2 emissions, but also other externalities like air pollution and congestion. Differentiated distance-based road infrastructure charges may play an important role in this respect.

A summary of the report can be found here.