Transport emissions, carbon taxes, and modal choice

Abstract

Transportation is one of the major sources of anthropogenic emissions. Yet most environmental regulations target production emissions rather than transportation emissions. Within the transport sector, there are considerable differences in emissions intensities across modes. In this paper, we develop and estimate a multinomial logit model of consumer mode choices for non-local travel using the 2017 Household Travel Survey to consider the impacts of carbon taxes on mode choices and emissions. The model is specified as a function of trip cost, travel distance, and a variety of household characteristics. The estimates are then used to calculate the impacts of incremental carbon taxes from none to $150/tCO₂ on both modal choices and emissions. We find that there are mode shifts to more fuel-efficient modes along with reductions in emissions as taxes increase. We also find almost linear relationship between carbon prices and abatement of non-local transport emissions with the largest reduction observed under $150/tCO_2.