Institute for Transport Studies (ITS)

Managing transport related climate, congestion and air pollution through externalities trading at a household level

Supervisors: Zia Wadud

Enquiries to: z.wadud(at)

Concerns over climate change have led to some reduction in emissions from different sectors of the economy in the UK, yet transport poses a special problem. Both globally and in the UK transport is the fastest growing sector in terms of carbon emissions. Several policy instruments exist to discourage emissions, of which the use of tradable permits is one. Emissions trading is a widely researched area in the context of mitigating carbon emissions or local air pollutants. So far the application of the policy has been to large polluting entities - e.g. power plants, steel and cement manufacturers, etc. - collectively known as point sources; and the application of emissions trading in transport is not common at all (barring recent inclusion of aviation in the EU-ETS scheme). However, transport emissions occur as a collective result of millions on individuals or households making their choices about the usefulness of the trip, mode of travel, purchase of an energy efficient or alternate fuel vehicle, etc. As such, it is the households or individuals who are the polluting entity, rather than the vehicle manufacturers. As such, applying the tradable permits approach to personal travel holds promise in reducing carbon emissions from the transport sector, although there has been very limited work in this area (e.g. Wadud 2011, Harwat et al. 2012).

At the same time, it is also important to ensure that the climate goal does not blind the policy approaches and other competing social goals are also included while devising a policy to combat climate change. The recent Volkswagen debacle and debate about diesel clearly indicate the air pollution risks posed by pursuing a 'climate only' goal. Similarly congestion is another externality - specific to the transport system - that needs to be addressed. While separate approaches can be used to tackle carbon emissions, local air pollutant emissions and congestion due to road travel, they always bear the risk of unintended effects as exemplified by the diesel debacle. As such, there is value in combining all three externalities within the umbrella of a tradable permit system at a personal/household level. This is what this project proposes to study.

There is very little evidence on the application of personal carbon trading in the road transport sector, a permit trading approach including all three externalities for personal travel is non-existent. The aim of this project is, therefore, to analyse variations in behavioural responses to such tradable permit instruments.

Entry requirements/necessary background for students

Quantitative discipline - Economics, Statistics, Environmental or Transport Studies (with strong quantitative skills), Decision Sciences, etc.

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