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

Abstract: In this paper we discuss, based on research on the external cost of air pollution, if diesel as a fuel in the transport sector should be encouraged or discouraged in Swedish environmental policy. There are two main reasons for posing this question. The first is the international context where the use of diesel is generally considered to be a bad, due to its negative health effects. The second is the Swedish context with an ambitious vision for a fossil free vehicle fleet in 2030 where the use of diesel produced from forestry residues could be part of the solution. In recent years the use of diesel cars has been encouraged by various policy measures, for example a subsidy based on assessments of emissions for CO2 per kilometer. Is this a policy that should be continued or abandoned? In this paper we focus on the health impacts and our conclusion is that dieselization is more a blessing than a curse. The reason is that Sweden is a sparsely populated country and therefore the health costs of emissions from road transport are low by international standards.

Keywords: environmental policy; fossil free vehicle fleet; fuel use; external health cost; impact pathway approach; cost-efficient emission reductions

JEL-codes: R40

20 pages, September 10, 2018

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