sectoral economic costs and benefits of ghg mitigation - IPCC

Terry Barker, Lenny Bernstein, Ken Gregory, Steve Lennon and Julio Torres Martinez
base case and a 20% carbon-constrained scenario. There are a series of pair-wise comparisons of
different technologies, e.g. 2-stroke versus 4-stroke engines for motorised cycles.
Jonathan Pershing commented on the presentation: 1) GHG mitigation is often a side-effect of
other transport policies, most notably those to reduce atmospheric emissions and congestion. 2)
There appears to be a conflict between the results presented in session 1 and the discussion in this
session. The results in session 1 showed that world oil demand is affected by carbon taxes and
that the oil-exporting countries stand to lose revenues as a consequence. In this session, the
discussion has been that transportation demand for fuels does not respond to increases in relative
prices brought about by carbon taxes.
Torstein Bye was concerned about the definition of transport being used in the chapter and
discussion. Surely this should be strictly transport services, and should not include transport
equipment such as road vehicles. On a separate point, relating to the question regarding whether
carbon taxes should be additive, the literature (Arnesson, 1975 and more recently Newbery,
1999) concludes that each externality should be taxed additively. On a further point, there is a
choice between taxes (revenues going to central funds) or charges (revenues allocated to
improving public transport) in curbing transport demand and emissions. The choice partly
depends on the incremental costs of transferring transport demand: if these are very low (e.g.
spare capacity on a rail link) then there is less justification for charges than if the costs are very
high (new rail link).
Oliver Headley in his comments suggested that the development of the road vehicle industry in
the USA in recent years has been towards higher GHG-emitting vehicles. For example many new
small cars cannot carry 3 people in the back seat, a devise to encourage the purchase of larger
“people-carriers” which produce higher emissions.
In his response, Ranjan Bose indicated that developing countries were looking at ways of curbing
the growth of road traffic. The view is that fuel taxes have little effect. Successful policies to
reduce congestion are to be found in Singapore with a combination of legal restraints and
demand management (registration fees for private cars, parking taxes and road tolls).
Ron Knapp commented that there are major problems in freight transport in some countries. In
India, the railways are overused; if the coal being transported were to be washed before being put
on trains, its weight/volume would be cut by 15%. In China there is an issue relating to the
market pricing of coal freight by rail. It may be more efficient to import low-cost coal into the
south of China, where the main demand is located, rather than transport the coal from the north to
the south by rail. In the US, trading in SO 2 emission permits coincided with the deregulation of
the railways and resulted in a considerable shift in the use and transport of low-sulphur coal; this
was an efficient market-driven solution to the problem of reducing SO 2 emissions, with lessons
for GHG mitigation policies.
On the use of renewal energy for transport, Oliver Headley asked if the increased use of land for
crops to provide ethanol would be at the expense of the use of land for food growing in
developing countries? José Moreira responded that, in accordance with their estimate, some 70
developing countries have the potential to grow crops for ethanol and many can easily allocate
land to this use without compromising production of food crops.
Marc Darras 1 suggested that, according to his experience, there is never a discussion of why the
transport sector should be required to reduce GHG emissions along with all other sectors, even
though it is recognised that the cost of abatement in transport is much higher than in many other
sectors. The reason is that there are many other externalities associated with transport that are
1
Additional comments provided after the meeting are given at the end of these session proceedings.
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