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Abstract: This paper analyzes the use of market-based emission regulation instruments to address the carbon dioxide emissions of transportation. Simulations with a static multi-region computable general equilibrium model show that including transportation into the European emission trading system is superior to a closed emission trading system for transportation or a tax-based approach. Furthermore, we show that exempting transportation from emission regulation is the most favorable approach in terms of welfare. This counterintuitive result is due to a large tax-interaction effect caused by high pre-existing fuel taxes in the transport sector. [Copyright &y& Elsevier]

Abstract A congestible urban transport system is considered in which cars and buses are used for commuting and non-commuting trips. Commuting is a strict complement to taxable labour supply. The optimal tax structure for raising a given amount of government revenue is examined for the cases where differentiation of transport tolls between trip purposes is and is not possible. An application to Belgian urban environments shows that optimal toll differentiation produces significant efficiency improvements. Without differentiation, reforming transport taxes generates substantial gains only when the labour tax can be reduced. [ABSTRACT FROM AUTHOR]

The article examines the impact of taxes on road congestion. The standard treatment of road congestion assumes that the value of time is the same for every journey, regardless of whom it is made by. Given this, the money value of the time cost of journeys is a unique function of the number of journeys, independent of demand conditions. This is a fairly radical simplification, and it is natural to ask how the policy conclusions about optimal congestion taxes are modified when the value of time is allowed to vary between journeys. The analysis shows that the tax will discourage journeys with low time values and will probably encourage journeys with high time values. Thus, leaving aside the disposal of its proceeds, the tax may well be regressive. The money value of the time cost of journeys is no longer a simple function of the number of journeys. It depends on which journeys are being made, and not only on how many. However, the time cost measured in units of time is an unambiguous function of the number of journeys. Thus, the free market equilibrium can be obtained by constructing a new demand function as a function of journey-time. This analysis of progressivity/regressivity has so far ignored the substitution effects of the tax and considered only the effect of cost differences applying to journeys made before and after the tax. In addition, one now needs to take into account the costs accruing to those low-income travellers whose journeys are deterred by the tax, and the gains to those high-income travellers whom the tax encourages to travel.