EFFECTS OF INTEGRATING ROAD TRANSPORT INTO THE EUROPEAN CO2 EMISSIONS TRADING
SYSTEM
SONNTAG Axel, Vienna University of Economics and Business, +43 1 31336 5822, axel.sonntag@wu-wien.ac.at
LECHNER Julia, Vienna University of Economics and Business, +43 1 31336 5763, julia.lechner@wu-wien.ac.at
MAIER Gunther, Vienna University of Economics and Business, +43 1 31336 4780, gunther.maier@wu-wien.ac.at
Overview
Road transport is responsible for about 30% of Austrian carbon dioxide emissions (Umweltbundesamt 2007). Considering the
compulsory Kyoto targets and the trend of an increasing traffic volume, promising strategies to reduce greenhouse gas
emissions have to be revealed and implemented (Bmlfuw 2007). As evidence clearly shows, several measures like fuel taxation
already in place cannot provide sufficient incentives to achieve a significant emissions reduction (Sonntag 2007). On the other
hand Electricity industry as well as other industrial branches are obviously emitting much less CO 2 as before the EU emission
trading scheme became implemented. This directly leads to the question of the potential, risks and consequences of a Europewide CO2-Certificate trading system for the transport sector. Effects of such a trading system on the Austrian road traffic are
going to be estimated within the research project MACZE1.
Methods
As economic theory provides a rich portfolio of policy instruments that are also applicable to reduce road transport CO 2
emissions the special features and inherent properties of a certificate trading system are investigated first. Besides its economic
efficiency introducing an Emission Trading Scheme (ETS) also for road transport has the clear advantage of maching the set
emission reduction targets for sure. By setting a properly defined cap that represents the actual CO 2 target figure the allocation
of the certificates than is established by the obliged actors themselves (over a market) according to their individual marginal
abatement costs. As there has already been collected experience in handling such CO2 markets in other economic sectors some
potential threats like teething troubles should be easily bypassed.
After this general introduction the actual investigation goes more into detail concerning the explicit economic and political
framework in which an ETS for road transport could be established properly. Every ETS rises or crashes depending on the
concrete specification of
 Who is obliged to buy and hold certificates? Against the background of economic efficiency and political feasibility,
important aspects of upstream, midstream and downstream approaches will be discussed in detail.
 Moreover it is not undoubtebly clear whether a CO2 market for road transport should be integrated into one European
inter sectoral emissions market or traded separately (e.g. only in the transport sector with at least controlled between
sector permeability). This is foremost a question of demand behavior (price elasticities) of the market actors which
will be considered in depth.
 Questions on the primary allocation of the certificates will also be dealt with. Considering the idiosyncrasies of road
transport aspects of the primary costs (auction or free allocation) and of fair distribution among the obliged persons /
institutions are enlighted as well.
Following the above analysis a CO2 market simulation model is developed that allows for calculating the CO2 price depending
on the demand of all affected economic sectors. This of course is important for price developments in road transport but for all
other branches included in the ETS as well, as they can be very well affected by a rising CO2 demand in transportation, fixing
the cap at a certain value.
Results
From a detailed investigation of the important questions on how the regulatory framework for an emissions market for road
transport should look like to fulfil certain standards of efficiency and feasibility a specific market model will be derived.
Additionally first results out of the CO2 market model simulations will be presented to give an impression what consequences
(also other economic sectors) can be expected if an ETS is introduced for road transport as well.
References
BMLFUW (2007) Anpassung der Klimastrategie Österreichs zur Erreichung des Kyoto-Ziels 2008-2012. Bundesministerium
für Land- und Forstwirtschaft, Umwelt und Wasserwirtschaft.
1
The transdisciplinary project will be carried out in colaboration with Institute for Transport Studies (University of Natural
Resources and Applied Life Sciences Vienna and is funded by the Austrian federal “Klima- und Energiefonds”.
KLEMENTSCHITZ, R., SAMMER, G. (1999): Reversible and flexible measures for energy-saving and reducing emissions in
transportation management. CD-ROM-Journal Fiatlux-publications, EnviroComp Institute, 1999, Fremont - California
(USA).
PISCHINGER, R., Hausberger, S., Sudy, C., Meinhard, J., Sammer, G., Thaller, O., Schneider, F., Stiglbauer, A. (1998):
Volkswirtschaftliche Kostenwirksamkeitsanalyse von Maßnahmen zur Reduktion der CO2-Emissionen des Verkehrs
in Österreich. Mitteilungen des Institutes für Verbrennungskraftmaschinen und Thermodynamik, Heft 72, Technische
Universität Graz.
SONNTAG, A. (2007) Perspektiven zur Reduktion des Erdölverbrauches im österreichischen Straßenverkehr. IN LEITNER,
G., GALVITZA, R., ROITHNER, T., ELBLING, A. (Ed.) Rohstoff- und Energiesicherheit. Stadt Schlaining, Austria,
Österreichisches Studienzentrum für Frieden und Konfliktforschung (ÖSFK).
UMWELTBUNDESAMT (2007) AUSTRIA'S ANNUAL GREENHOUSE GAS INVENTORY 1990–2005. Vienna.