Keywords: air pollution, transport, tax policy, regulation
Limiting air pollution from transport: economic evaluation of policy options for the European Union
Policies addressing air pollution from transport have in the past mainly focused on SO2, NOx and VOC through vehicle emission and fuel quality regulation. More recently however, CO2 emissions and particulates have come on the agenda because of global warming and the perception of the major role of particulates in health damage. This shift is also reflected in the last proposed directive by the European Commission and the European Parliament and in the agreement between the European Commission and the Auto Industry. The objective of this paper is first to evaluate the impact of the new policy proposals and, secondly, to look at a policy combining these new policy proposals with a tax reform aiming at more neutrality between fuels in terms of environmental damage. The analysis uses the PRIMES transport model in combination with the PRIMES refinery model, in order to assess both the energy demand impact and the supply impact of the proposed policies.