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A system of tradable permits applied to fuel consumption by motorists

Abstract : Decentralized transferable permit systems in the transport sector can be of interest with regard to reducing greenhouse gas emissions, in spite of anticipated transaction costs. This paper describes a concrete application of a domestic market for motor vehicle fuel consumption permits. The marginal costs of consumption reduction vary sufficiently according to motorists' residential locations to consider permit exchanges. Economic evaluation of this system reveals that there are transfers of surplus between the various groups of motorists according to their residential locations. The central government may lose significant revenues when compared with a conventional fuel tax. Lastly, the issue of transaction costs, the benefits and disadvantages in terms of social acceptability and equity are discussed.
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Charles Raux, Grégoire Marlot. A system of tradable permits applied to fuel consumption by motorists. WCTRS, ITU. 10th World Conference on Transport Research - WCTR'04, 4-8 July 2004, Istanbul, Turkey, 2004, Lyon, France. 15 p. ⟨halshs-00093244⟩

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