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Fueling Global Warming: How prices on fuel affect carbon emissions from the road transport sector
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics.
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics.
2016 (English)Independent thesis Basic level (degree of Bachelor), 10 credits / 15 HE creditsStudent thesis
Abstract [en]

World leaders gathered in Paris last December to discuss the emerging climate threat. An important area of emission reduction is the road transport sector. The purpose of this study is to provide leaders with updated estimates on how a change in the price of gasoline and/or the price of diesel for private use will affect the carbon emissions from this sector in industrial countries. We employ a data set of 25 OECD-countries over the years 2002-2012 to obtain price elasticities of diesel and gasoline. A partial adjustment model and four estimation techniques were used when conducting the regression analysis. We were not able to find a significant estimate of the price elasticity of diesel but our re-sults indicate that a 10 % increase in the price of gasoline would lead to a 0.5-1.8 % reduction in car-bon emissions from the road transport sector in the short-run and 1.2-4 % reduction in the long-run.

Place, publisher, year, edition, pages
2016.
Keyword [en]
Carbon emissions; road transport; fuel price elasticities; OECD; optimal tax
National Category
Economics
Identifiers
URN: urn:nbn:se:uu:diva-274862OAI: oai:DiVA.org:uu-274862DiVA: diva2:897754
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Available from: 2016-01-26 Created: 2016-01-26 Last updated: 2016-01-26Bibliographically approved

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