Are there cost-efficient CO2 reduction possibilities in the transport sector? - Combining two modelling approaches

To determine the real cost of CO2 emission abatement in the transport secto r is difficult because this sector is characterized by many market ineffici encies. There are important negative externalities that are addressed by in efficient instruments like fuel taxes. First a transport model is used to e stimate the effect on transport flows of a better internalization of the ot her externalities like congestion, accidents and the emission of non-greenh ouse gases by switching from fuel taxes to road pricing. Technological prog ress will make this switch feasible. Next the new transport flows are used as inputs in a partial equilibrium model for the energy sector to estimate more correctly the cost effective contribution of the transport sector in t he national CO2 reduction required. It is shown that, under these condition s, the potential or cost effective CO2 reductions in the transport sector i s very limited.