Scandinavian Working Papers in Economics

Working papers in Transport Economics,
CTS - Centre for Transport Studies Stockholm (KTH and VTI)

No 2013:4: Why do CO2 emissions from heavy road freight transports increase in spite of higher fuel prices?

Inge Vierth ()
Additional contact information
Inge Vierth: VTI, Postal: Centrum för Transportstudier (CTS), Teknikringen 10, 100 44 Stockholm, Sweden

Abstract: The paper analyses why CO2 emissions from heavy road freight transports increase in spite of higher fuel prices. Swedish time series data for the period 1990-2011 are analyzed with help of indicators. The logistic efficiency of the road transports improved especially in the 1990-ties due to the allowance of heavier trucks. Also the energy efficiency increased during that period. Since then there have been improvements but no major efficiency gains have been realized. Today potentially cost effective technologies exist to further reduce the CO2 emissions from heavy road freight transport. However, technical, institutional and financial barriers reduce the incentives for the transport firms to imply these. Split incentives caused by contract structures or ownership patterns can impede the employment of these technologies, as the firms that invest in the technologies have little incentive to do so. If fuel savings are realized rebound effects can appear that cancel out improved energy efficiency. The internalisation of the social marginal costs can lead to modal shifts to less carbon intensive modes, but shippers minimize their total costs and take into account quality aspects when choosing transport solutions. There are obstacles for the increase of the share of non-fossil energies in form of access to raw material, infrastructure for vehicles that can use the alternative fuels etc. On the national and international road freight transport markets staff costs are often more important than taxes and fees. Deeper knowledge of the impacts of different policy measures is required in order to understand why the CO2 emissions increase despite increased fuel prices. A better understanding of the implications of the lack of thresholds and other model simplifications in the Swedish Samgods model is also needed and an analysis of what is required to better mirror the contracts that we observe in reality. It is also necessary to study the role of the lighter trucks in the transport chains.

Keywords: CO2 emissions; Road freight transport; Climate policy measures; Barriers; Split incentives

JEL-codes: R41; R48

25 pages, May 8, 2013

Note: This paper is published as:Transport Research Arena (TRA) 5th Conference: Transport Solutions from Research to Deployment. Paris, France, April 14-17, 2014

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