This paper surveys some recent studies on conventional air pollution and climate change in the transport sector in Europe. Fuel efficiency standards, car emission standards and transport pricing instruments are analysed from an economic perspective taking into account environmental and economic efficiency objectives.
EU countries want to decarbonize their road freight transport quickly. Long-haul electric trucks are a promising technology. There are several competing designs but at present the trade-off is between e-trucks with very large batteries and e-trucks with a smaller battery but combined with motorways electrified via catenary lines. In the latter case a combination of public investment (catenary lines on major motorways) and private investment (electric trucks) is required. As long-haul truck transport is partly international this raises problems of coordination among countries. We study the possible pricing and investment strategy of one forerunner country that faces lagging neighbors. The forerunner can make the use of electric trucks mandatory on its own territory by using very high road charges for diesel trucks. If it has opted for a catenary system, it faces still the choice of how it will price the use of its electric motorways. International diesel trucks, when crossing the border of a forerunner country, have to choose between paying high charges and transferring the load into an e-truck. We study the outcome of this international coordination game exploring the non-cooperative outcome varying the relative size of the forerunner in international truck traffic and varying the cost of electric highways.
The transport sector is the only sector where carbon emissions continue to grow. This has led policy makers to propose ambitious policies to reduce emissions in the car sector, in particular fuel efficiency standards, portfolio mandates for Electric Vehicles and purchase taxes or subsidies. A portfolio mandate describes a minimum quota of annual electric vehicle sales. We use a two-period model for the car manufacturing sector to compare the cost efficiency of these policies. The model has gasoline fuelled cars (GV) compete with battery electric cars (EV). Both types of cars have endogenous technological progress that is triggered by environmental policies, including tradable fuel efficiency standards, portfolio mandates, carbon taxes, purchase taxes and R&D subsidies. EVs can serve as batteries that permit grid operators to shift off peak (renewable) electricity to peak hour supply. The model is calibrated to evaluate the EU policy to reduce average carbon emissions of cars by 37,5% in 2030. We assess the cost-efficiency of three types of policy instruments evaluating production costs, fuel costs, and externalities. We find that a fuel efficiency standard targeting gasoline cars achieves emission reductions at a much lower cost than a portfolio mandate for Electric cars.
The city of Brussels has a unique position in Europe. It is not only the capital city of the European Union, it also the capital of federal state of Belgium, of its two different language communities and of the government of the Brussels region. Independent of this, the city itself is composed of 19 communes with a (by comparison in Europe) large degree of independence from the central authority. The intertwining of different public institutions and the sheer complexity of those institutions make it difficult to identify single policies performed in Brussels as well as the competences of the public actors. The present paper treats a city, much like the city of Brussels, and its border region as an urban employment center, shared by two language groups. Both groups commute to the city center and share a space in the urban labor market. We treat the locational preference of households in and around this city, taking into account the preference of each language group for public facilities in their native language. We first derive a first-best optimum for the whole city and derive the locational equilibrium of both groups. This is considered both with and without moving costs. Then we consider restrictions to the availability of public facilities for each group, dependent on political restrictions or local regional preferences. In a last section, we consider the impact of transport infrastructure, a numeric overweight of one group and elaborate more on possible impacts of migration and agglomeration effects within the city. Innovative elements in the model are the treatment of the language groups and its implementation in the urban model. The paper treats how this can be introduced in an applied model for Brussels and gives directions for future work.
This paper analyzes the optimal configuration of urban congestion tolls on work-related traffic, in a second-best setting where only one road in a network can be tolled. Both heterogeneity in labor productivity and income distribution concerns are considered. The optimal toll balances two types of considerations. First, the efficiency in correcting the marginal external congestion cost on the tolled road, given the distortion on non-tolled roads. Second, the equity consideration that takes into account who uses the tolled road and how toll revenues are spent. Both separating and pooling equilibriums are analyzed for two alternative uses of the toll revenues: poll transfers or labor-tax cuts. Using numerical simulations, we show that the equity concern can lead a government to prefer recycling via poll transfers rather than via labor tax reductions.
International audience ; Many local public goods are allocated by federal governments using fixed regional shares: every region is entitled a fixed share of the total budget for a particular type of public good. This paper explores two characteristics of this type of allocation. First, it shows that this type of allocation is relatively efficient as it puts a strict budget constraint on the decisive region. Second, we show that these fixed shares can be an equilibrium of different legislative bargaining processes. The working of the fixed sharing rules is illustrated for the allocation of railway investments in Belgium.
International audience ; Many local public goods are allocated by federal governments using fixed regional shares: every region is entitled a fixed share of the total budget for a particular type of public good. This paper explores two characteristics of this type of allocation. First, it shows that this type of allocation is relatively efficient as it puts a strict budget constraint on the decisive region. Second, we show that these fixed shares can be an equilibrium of different legislative bargaining processes. The working of the fixed sharing rules is illustrated for the allocation of railway investments in Belgium.