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Ph. D. Thesis information

Modelling and assessment of sutainability in transport policies

Alessandro Danesin

Supervised by Pedro Linares Llamas

The objective of this thesis has been to assess how policy interventions could affect the sustainability of transport sector, analysing the limits and the benefits of its implementation. For this purpose, we first study the demand for transport and in particular one of its main drivers, fuel consumption. We then focus the attention on metropolitan areas, significant for both economic activity, population density and so number of trips and adverse effects of mobility (air quality, congestion). In both cases we analyse the simulated effects of implementing a green reform proposal that, although proposed for all the energy sector, should have a significant impact on the transport sector, providing first a homogeneization of fuel prices based on their energy content and then adding a CO2 component to correct for the lack of a correct internalization in the price of the effects of emissions. To carry out this analysis and study the transport demand in Spain, we first propose an econometric model for fuel consumption (chapter 3) that includes in the usual “ideal” demand formulation, the specification of the explicit component for diesel share. Results show a significant negative effect of the diesel share when considering the specific gasoline or diesel consumption. This result alone clearly suggests that a higher diesel share should lower the consumption (per vehicle) of fuel. An interpretation is that increasing shares show shifts for lower-range consumers to more efficient vehicles thus improving energy consumption. Simulating the effects of a fiscal policy proposal, we found that an adjustment and harmonization of diesel and gasoline prices (as is the purpose of the green reform) could indeed reduce emissions, although in the short term the CO2 emissions avoided in the transport sector could reach just 5.5%. For the long-run impact, results could reach up to 38% of emission savings, although the low speed of adjustment suggests that such an evolution would need many years. As for the simulation model for five Spanish metropolitan areas, our results reinforce the conclusions previously offered. The first general highlight is that this reform will be more effective the more options available to shift away from diesel vehicles. That means basically public transport modes, particularly those fueled with electricity (e.g. subway). Of course, the larger the share of diesel, the larger are the expected reductions in energy use. And finally, welfare losses are also lower the more flexibility there is in the metropolitan area regarding transport modes. However, it should also be noted that the simulated reform will do little to reduce environmental impacts, and may result in lower welfare for consumers, at least when considering just the metropolitan areas and not a proper redistribution program. Moreover, the sign of the welfare has to be taken as limited since it only takes into account metropolitan areas and not, for instance the (positive) fiscal returns. Our results show that this tax hike would only take care of around 7.5% of the total reductions required. Therefore, even in the metropolitan areas more receptive to it, other measures and policies will be required. However, our major messages regarding the policy implications of our study remain valid. First, the stringency of fuel tax reforms or other price mechanisms to reduce the use of diesel fuel or diesel cars should be carefully adapted to the availability of options in each urban area. When these options are not readily available, the welfare costs of the policies may become significant, hence affecting their public acceptability. Therefore, other policies that increase sustainable transport options should be prioritized before tax reforms are implemented. Second, the effectiveness of fuel tax reforms is limited, in that they can only produce a small fraction of the carbon emissions reductions required.

Universidad Pontificia Comillas. Madrid (España)

10 July 2017

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