sectoral economic costs and benefits of ghg mitigation - IPCC

Terry Barker, Lenny Bernstein, Ken Gregory, Steve Lennon and Julio Torres Martinez
- absence of traffic reduction strategies,
- an ageing and ill-maintained vehicle stock,
- wide-spread use of two-cycle engines,
- absence of efficient public transport systems,
- poor conditions for pedestrians and cyclists,
- inadequate separation between living, working, and moving spaces, and
- lower fuels quality.
The result is traffic congestion, which causes longer travel times, discomfort to road users, extra
fuel consumption, high GHG emission, and high air pollution levels, which cause adverse health
effects. These adverse health effects are the main motivator for the emerging priority for air
quality management in developing countries. Vehicle emissions can be reduced by 1) reducing
emissions per kilometre travelled, or 2) by reducing total kilometres travelled. CO 2 is the main
GHG produced by the transport sector and the primary means of reducing its emissions is by
reducing fuel use.
Bose then explored a number of strategies for reducing both air pollutants and CO 2 emissions
from transport. By considering cases for specific cities (Delhi, Mexico City and Santiago, Chile),
he concluded that technological fixes, such as improved emissions control systems would not
achieve simultaneous reductions in air pollutants and GHG emissions. Behavioural changes that
reduced the demand for private transportation were necessary. He concluded by considering
some of the challenges that face policy-makers, including: compiling credible data, tools for
analysis, and setting up a unified institutional framework for achieving change.
Discussion on Road Transport
José Roberto Moreira, of the Biomass Users Network, Brazil presented an analysis of the full
social cost of road transport. Using data from Michaelis (1996) he showed that current road use
charges in the U.S. and Japan do not pay for the cost of the road network, whereas in France they
more than pay for this system. He then added the cost of externalities and concluded that in none
of the countries considered did the price of transportation fuels pay the full social cost of fuel
use.
Moreira then presented data on the fuel efficiency improvements obtained through technological
change. These data indicated that from 1970 to 1993, only modest improvements had been
achieved, except in the U.S. where vehicles started with much poorer efficiency. He also
presented estimates of the amount of CO 2 emission reduction that could be achieved by future
technological change and its cost. He compared these to the CO 2 emission abatement and cost of
using ethanol made from sugar cane as a transport fuel, and concluded that this approach offered
the cheapest alternative. Additionally, there could be significant social benefits to developing
countries which exported biomass fuels.
Discussion on Personal Transport
Michael Whinihan of General Motors Corporation prefaced his remarks by saying that they were
the personal view of an economist. What is the justification for imposing mitigation targets on
one sector, namely transportation, to meet Kyoto targets? It makes no economic sense to impose
equal targets on all sectors because the net costs of mitigation are different for different sectors.
(The estimated net costs for the transport sector are much higher than for some other sectors
perhaps $1000 per tonne carbon mitigated.) It is wasteful to require a sector such as transport,
with high mitigation costs (because of the difficulty of substituting away from oil) to achieve the
same proportional reduction as other sectors. An overall solution to the mitigation problem is the
imposition of a carbon tax applying to all sectors at the same rate. This would be a cheaper and
more efficient solution compared to that from imposing fixed arbitrary targets on different
sectors.
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