There are an ever-increasing number of cars on the roads, and we are driving more and more kilometres in them. This is not very consistent with the target to reduce our carbon emissions by 70 per cent by 2030. How do we meet this target? Professor Jeppe Rich from DTU Management answers this question.
How will we meet the 2030 target of a 70 per cent reduction of carbon emissions for passenger cars?
We will not. Despite increasingly energy-efficient cars and an increasing number of electric cars on the roads, private car use emits about as much CO2 today as in 1990, because the number of cars has risen every year since then. The target of reducing carbon emissions by 70 per cent for passenger cars as early as in 2030 therefore seems unrealistic, regardless of which instruments we introduce to curb emissions.
Which instrument is the most effective?
The best instrument is taxes on petrol and diesel; there is fairly broad consensus on this among economists, as this is a direct tax on carbon emissions. Because the more petrol and diesel you use, the more CO2 you emit. Higher taxes can curb the consumption of fossil fuels and thus reduce carbon emissions. Higher taxes on petrol and diesel may also incentivize more people to switch to electric cars instead.
The disadvantage is that petrol and diesel are already subject to high taxes, and the tax screw probably cannot be tightened much further before we encounter a cross-border problem with more people starting to refuel outside Denmark.
Higher petrol and diesel prices will also hit low-income households harder, as they will have to spend a proportionately larger share of their disposable income on refuelling than wealthier citizens.
Can road charges be a solution?
Partially. The advantage of road charges is that it does not give rise to a cross-border problem unlike taxes on petrol and diesel. Road charges also have the advantage that they can alleviate congestion, because motorists have to pay for the stretch they drive, which will undoubtedly make some people limit their driving or choose other modes of transport. But like all other charges and taxes, a road charge will hit low-income households hardest.
To reduce carbon emissions from passenger cars, the ideal solution is probably a combination of road charges and fuel taxes.
Can you get more people to choose to cycle or use public transport?
Unfortunately, experience shows us that it is very difficult to get motorists to switch to bicycles or public transport. We have seen that greater investments in both cycling infrastructure and public transport mostly result in changes among these two types of road users. Meaning that cyclists choose public transport when improvements are made in this sector, and public transport passengers get on their bicycles when improvements are made for cyclists. Motorists are less inclined to drop their cars and switch to cycling or public transport.
Nevertheless, improvements in both cycling infrastructure and public transport can make a difference. But the politicians must dare make a clear prioritization of the investments, so that they are made where we get the most value for the money. And this is in the large cities, where public transport and cycling infrastructure are to accommodate the largest number of people. For public transport, this is unfortunately a type of infrastructure project that it will not be possible to have in place by 2030 if this involves very extensive changes. This contributes to making the target of a 70 per cent reduction of carbon emissions from passenger cars seem unrealistic.
What is a realistic target?
When I put on my most optimistic glasses—and provided that the politicians use the right instruments with due care—we may perhaps achieve a 20 per cent reduction in carbon emissions from passenger cars by 2030.
Will we never meet the target?
Yes, but the time span is too short. That does not mean that we should not take action. The risk of the 2030 target right now is precisely that it appears cut off from reality, which means that the citizens just end up shaking their heads instead of making changes. After all, 2030 is—strictly speaking—just a year some people have selected—more or less randomly. Other countries operate with other time spans.
What is a realistic time span for Denmark?
If—for example—we set 2036 as the target year, the possibilities of meeting the target of a 70 per cent reduction for passenger cars would be more realistic. The challenge with the transport sector is that it takes a long time to adapt. For example, the average service life of a petrol or diesel car is 15 years. So—by 2036—the petrol and diesel cars that are sold today will be ready for scrapping. You could say that the figures are less against us if we move the target by six years. Conversely, climate change does require urgent action. Therefore, there is a need to counter the effect of lower reductions by 2030, for example by finding reductions in other sectors. It has long been pointed out—including by the Economic Council—that this is a more effective way of meeting the 2030 target.