European road transport policy assessment: a case study for Germany

Abstract

In the EU, the transport sector is the only sector with increasing GHG emissions compared to 1990. While harmful emissions have decreased due to successful regulation, transport performance, fossil fuel consumption and thus CO2 emissions have continued to increase, despite powertrain efficiency improvements. Meaningful regulation, which can be market-based (MBI) and non-market-based (NMBI) by nature, is needed to meet climate targets. To understand the mechanisms, effects and limitations of MBI and NMBI, this study investigates and evaluates selected regulations in the German road transportation sector until 2020. Therefore, this study identifies, describes, and categorizes environmental policy instrument types. Based on this step, selected instruments in the road transportation sector are identified by their type and implemented policies are described and assessed. Furthermore, an assessment methodology is developed to evaluate and score target achievement, cost-efficiency and practical feasibility by linking the outcomes of instruments to its goals. Based on the findings of this assessment, conclusions and recommendations are developed and discussed. Finally, results and general properties of policies and their type of instruments are extrapolated, and general statements about market and non-market-based instruments in a broader context for future regulation and market designs are projected. The study discovers that fuel producers and distributors, vehicle manufacturers and sellers are directly regulated by non-marked-based instruments, despite the EU Emissions Trading Scheme (ETS). On the customer side, primarily market-based implemented except for low-emission zones, which are direct regulations. The study finds that holistic representation and realistic internalization of external effects in a market is complex and will never be complete. Still, sufficient representation can be enough to drive transformation in the transport sector. The CO2 price itself is not sufficiently representing the consequential costs of climate change induced by road transport, but it helps to make low-carbon alternatives economically viable. Overall, the study finds that most implemented regulations in the German road transport sector were successful in relation to their goals.