Carbon tax and driving

Dave Sawyer, one of the authors of the National Round Table on Environment and Economy report, and blogger at EnviroEconomics.ca, makes some pertinent insider comments on the efficacy of a carbon tax in reducing emissions from personal transportation, a major source of emissions:

While the carbon tax will “drive” some reductions in vehicle kilometers traveled, we can’t expect much from a carbon tax or emission pricing in the transport sector. Sure, high fuel prices will change some behavoiur in the transport sector, but experience has shown that folks are simply insensitive to fuel prices, especially in the short term and somewhat in the longer-term. This means that carbon prices need to be complemented with vehicle standards, California style.

In the NRTEE modelling, and indeed in most carbon abatement assessment, the transport sector is the last to respond, and one of the reasons why deep GHG reductions result in exponentially rising abatement cost curves at emission prices above $200. The insensitivity to the transport sector to high emission prices is one reason why international trading looks really good and fuel economy standards even better.

So, while a carbon tax or carbon price is a corner stone of effective climate policy, complementary vehicle fuel standards are a necessity to address our collective addiction to the car….