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Carbon Price Efficiency Lock-in and Path Dependence in Urban Forms and Transport Infrastructure

Abstract : This paper investigates the effect of carbon or gasoline taxes on commuting-related CO2 emissions in an urban context. To assess the impact of public transport on the efficiency of the tax, the paper investigates two exogenous scenarios using a dynamic urban model (NEDUM-2D) calibrated for the urban area of Paris: (i) a scenario with the current dense public transport infrastructure, and (ii) a scenario without. It is shown that the price elasticity of CO2 emissions is twice as high in the short run if public transport options exist. Reducing commuting-related emissions thus requires lower (and more acceptable) tax levels in the presence of dense public transportation. The emission elasticity also depends on the baseline scenario (especially population and income growth) and increases over time. In the longer run, elasticities are similar in the scenarios with and without public transport, due to larger urban reconfiguration in the latter scenario. This analysis may help calibrate general equilibrium models by providing price elasticities that depend on socio-economic and public transport infrastructure scenarios. If the goal of a carbon or gasoline tax is to change behaviors and reduce energy consumption and CO2 emissions (not to raise revenues), then there is an incentive to increase the price elasticity through complementary policies such as innovation support and infrastructure development.
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Submitted on : Monday, November 17, 2014 - 7:19:01 PM
Last modification on : Friday, August 5, 2022 - 2:38:11 PM
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Paolo Avner, Jun Rentschler, Stéphane Hallegatte. Carbon Price Efficiency Lock-in and Path Dependence in Urban Forms and Transport Infrastructure. World Bank Policy Research Working Papers, 2014, pp.1 - 26. ⟨10.1596/1813-9450-6941⟩. ⟨hal-01083739⟩

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