INTERNATIONAL COLLOQUIUM on TRANSPORT, ENERGY AND GREENHOUSE GASES

M. E.H. LEE-GOSSELIN, C. RAUX, Y. CROZET, J. DOUCETReport

INTERNATIONAL COLLOQUIUM on
TRANSPORT, ENERGY AND GREENHOUSE GASES– Will Rationing be Necessary? –Martin E.H. LEE-GOSSELIN

Charles RAUXProfessor, Graduate School of Planning, Université Laval
Québec, Canada

Professor, Transport Economics Laboratory, Université de Lyon
Lyon, France		Yves CROZET

Joseph DOUCETProfessor, Transport Economics Laboratory, Université de Lyon
Lyon, France

Professor, School of Business, University of Alberta Edmonton
Alberta, Canada(Received February 9, 2007)

1. INTRODUCTION
Since 1987, a unique series of international scientific colloquia have taken place every year under the auspices of collaboration between the Rhône-Alpes regionof France and Québec, Canada. Known as the Entretiens
Jacques Cartier, these colloquia cover a wide range ofsubjects related to regional development, the economy,culture, and current and future challenges to society.
Over the years, part of this last theme has often been devoted to the challenges associated with transport in Europe and North America. It was thus that, in December
2006, researchers from six countries met in Lyon, France,bringing an unusually broad set of perspectives to bear on
the problem of reducing greenhouse gas (GHG) emissions in the transport sector, and in particular to consider
whether various forms of regulation and rationing are
an inevitable part of the solution. The two-day colloquium was opened with a keynote address by DominiquePerben, the French Minister of Transport, Infrastructure, Tourism and the Sea, and was organised into six
debates drawing on a total of sixteen invited papers1 anda number of discussion responses. This article provides
an over­view of the main issues raised in the debates andthe findings of the Colloquium.

1

The complete programme and a copy of the presentations can be accessed at http://www.let.fr/ejc2006/

2. THE DEBATES
2.1

What is the need for action?
In high-income countries, approximately 25% to
30% of the emissions of the principal greenhouse gas,carbon dioxide (CO2), comes from the transport sector,
and those emissions are growing in absolute and relative terms. This growth seems inevitable because of theoverwhelming dependence of transport on internal combustion technologies in the shorter term, and a strong
coupl­­ing between economic growth and rising vehiclekilometres of travel (VKT). In his keynote address, wewere charged by Minister Perben to think boldly given
the seriousness of this situation. In particular, we wereurged to think of ways to implement “virtuous” economic mechanisms that are consistent with solving environmental problems. This was itself “bold” as, in the past,market instruments have not been universally embraced
as part of national energy and environment policies inFrance and other major emitters of greenhouse gases. It
was also significant that the Minister talked about using
economic instruments to modify behaviour, and took apersonal position that individual tradable quotas should
be among the options considered.
The debate about the need for action focussed initially on the estimation of the peaking of conventional oiland gas production and the timing of its expected decline,
in relation to the expectations for technologically morechallenging sources of hydrocarbons, notably synthetic
fuels made from coal, shale or oil sands, of which enorIATSS Research Vol.31 No.1, 200741

EFFORTS To Reduce Co 2 in the Transportation Field

mous reserves exist around the world. A major concern
was whether the market would support prices sufficiently
high to pay for the sequestering of carbon that would otherwise be released during the production of synthetic fuels, adding to the carbon released from end-use. The
potential role of nuclear energy and biofuels was raised
to mixed reactions. There was a lively discussion of the“seductive” situation that conventional oil production
tends to peak before half of all discovered reserves havebeen exploited, and of whether the “oil peaking” analyses
have fully taken into account the dynamics of markets,
such as the increased incentives for exploration or enhanced oil recovery that result from increasing prices.
There was agreement that fuel prices should correctlyreflect the environmental externalities associated withcarbon emissions, but there was no consensus that theinstitutional and political mechanisms to achieve thiswould come about in the shorter term, or indeed whether
prices alone could lead to a less harmful level of consumption.
This first debate continued around the prospects
for radical improvements in light- and heavy-duty motor vehicle fuel intensity, including hydrogen technologies, with general agreement that these could not diffuse
into the world vehicle population quickly enough to reverse the growth in transport’s GHG emissions in themedium term without other measures. However, suchtechnologies were seen as of great importance as were,potentially, the efforts of governments to stabilise market
conditions for their rapid development and deployment.
This brought the debate back to the growth in vehiclekilometres of travel (especially air travel), and to therelative adequacy of price versus quantity rationing systems to limit the global quantity of carbon emissions.
Precedents for tradable permits were discussed, together
with ideas about who, realistically, could act in carbon
markets, such as manufacturers, transporters, regions, orindividuals, thus setting the stage for the following debate.
2.2

What is the scope for action?
In the second debate, the potential scope for government intervention to reduce GHG production fromtransport was explored further, sharing experience withthe regulation of vehicle fuel economy standards, the results of backcasting exercises that postulated dramaticreductions in GHG emissions, and the outputs of macromodels that were used to evaluate multiple technologicaland policy options at the planetary level. Broader issues
such as restructuring transport systems and land-use, or42

IATSS Research Vol.31 No.1, 2007

investment in public transport, were not included, as thefocus of this Colloquium was on regulations and markets
for quotas and permits; but of course it was recognisedthat the mechanisms for limiting GHG production byprice or quantity have implications for other domains ofintervention. There was a near-consensus that packagesof mutually reinforcing interventions would be needed toachieve the greatest reductions. Transferable permits imply a range of interventions from introducing flexibility
into classical regulation systems all the way to unrestricted markets in permits. The idea of using permit markets
to achieve quantitative targets (such as GHG reductions)
within the transport sector was seen as relatively novel.
On a related point, several speakers underlined the importance of the carbon market, even if the current market
price of carbon is much below that suggested by various
recent estimates of the economic damage associated withcarbon emissions.
2.3

The feasibility of quotas on traffic
The focus of this debate was on vehicle movements.
An evaluation, based on survey data, was presented of apotential system for credit-based congestion pricing, as it
would be applied to passenger automobiles in a major UScity. This illustrated the use of a pricing system that provides users with feedback on marginal social costs, dynamically. While the predicted effects would be a spatial
and temporal reorganisation of traffic, some reduction in
vehicle-kilometres of travel could also result. The discussion moved to the idea that the VKT of an urban region
could be capped. Concerns were raised about urban/ruralequity, social equity and the effects of potential solutions
on land markets. A fixed limit on traffic was also the subject of an example that was presented from the freightsub-sector. In this case, heavy truck traffic crossing theSwiss Alps, a limit on the number of vehicle movements
has been imposed by national referendum, starting in2009. Total transalpine goods traffic is expected to increase by 50% by 2030, and findings on a proposed open
market in crossing rights through Swiss territory was discussed in relation to its impacts on adjacent countries andalternative alpine routes. It could be inferred from thisdebate that dynamic pricing or quota systems addressing
mobile sources of GHG are feasible both for private passenger vehicles and heavy goods vehicles, but that thesesystems must cover sufficient territory and be carefully
designed to avoid perverse effects.
2.4

The allocation of carbon to individuals and firmsCompared to the debate about traffic, there was less

INTERNATIONAL COLLOQUIUM on TRANSPORT, ENERGY AND GREENHOUSE GASESof a consensus between speakers and participants regarding carbon or energy allocation systems applied to individuals, household and firms. This was the case both atthe level of principles and at the level of potential mechanisms. Once again, the advisability of a strong “cap” ranthroughout the discussion: whether it was too draconian
if applied to private consumption; whether carbon permits trading would fit well with broader consumer actions; and whether or not it would engender cooperative
behaviour. Presentations looked both at the theoreticalconsequences, including social equity, of individual
quota systems, and at the lessons learnt from the energy
contingency policies of the 1970s and 1980s. Three arguments stood out. First, public and political acceptance of
quotas is much more difficult in the context of a “creeping” problem such as global climate change than when
faced with emergencies such as supply disruptions: research confirms that the same individuals behave differently in these two contexts. A second and related argument
was the complexity of getting public acceptance of quota
accounting frameworks that mix current and future consumption/emissions, for example over the lifetime of afuel-efficient vehicle: in the view of some, this problem
has not been resolved in the design of transferable permit
systems for fuel and vehicle producers, let alone forhouseholds. Thirdly, the design of good policies requires
reliable, disaggregated information on the state of consumption (for example the carbon associated with different categories of household expenditure), and on thecurrent and potential response of consumers.
2.5

The automotive industry
The debate on ways to regulate the emissions characteristics of motor vehicles included a comparison ofvoluntary and mandatory instruments used by federal
governments in North America and the European Union.
Of key interest was the cost of achieving different levelsof CO2 / Kilometre and the relationship between thosecosts and the cost of environmental damage associatedwith carbon emitted throughout the entire life of the vehicle, which is to say from manufacture, use and disposal.
One speaker claimed that the economic benefits of radical improvements in light-duty vehicle fuel efficiency, incombination with reduced VKT and low-carbon fuels,
are potentially very large and would have a major positive impact on employment. Speakers with diverse backgrounds from both sides of the Atlantic expressed support
for regulations and agreements that accelerate bringing
lower-emission vehicles to market, but without prescribing the technology that manufacturers should use. SomeM. E.H. LEE-GOSSELIN, C. RAUX, Y. CROZET, J. DOUCET

believed that a market in emissions quotas for a manufacturer’s entire new vehicle production would lead to alower unit cost for low-emission vehicles. Also, of contemporary interest, was the spread of parallel vehicle
taxation policies that reinforce the demand for such vehicles.
2.6

The transport operators
The last of the six debates again took an international view, focussing on two types of transport operators, airlines and surface freight. These were chosenbecause of their close association with economic growth.
The case of very rapid airline growth was seen as particularly important, even if their total GHG emissions are asmall percentage of total transport emissions. Of concern
was that aviation is not included in the European Union
Emissions Trading Scheme, which since 2005 has been
the world’s first large-scale GHG trading programme.
The trial implementation of permit systems in the aviation sub-sector was seen as both necessary, in order toestablish a shock absorber in future instances of tight fuelsupply, and as problematic, because of the high portionof air travel that crosses the borders of jurisdictions that
could administer such systems. There were interesting
parallels with the case of surface freight, of which theinternational component has, in general, been growing
faster than the domestic component, both within and between large trading blocks. Here, the fear that GHG quotas
would harm national competitiveness was seen as a brakeon public policy, although one speaker noted that thecontention of this issue should be weighed against therelatively small proportion of costs that transport represents for many commodities. Another made the case thathauliers would prefer a purchased quota trading systemthat involved the negotiated transfer of quotas from shippers to hauliers, than one in which free allocations weredistributed: reportedly, their primary motivation would
be the stabilisation of fuel costs. Once again, there was anappeal for improved information, especially to better understand the price sensitivity of truck fuel demand andindeed the price sensitivity of the demand for truckingservices.

3. SUMMING UP
With the help of two commentators, one from
France and the other from Canada, who reflected on theissues raised in all six debates, the colloquium participants shared their sense of the priorities for building aresearch evidence base for greenhouse gas and energy
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43EFFORTS To Reduce Co 2 in the Transportation Field

policy in the transport sector. An earlier speaker had
pointed out that the schools of thought underlying thedesign of rationing instruments can be distinguished interms of the balance, on one hand, between price andquantity, and on the other, between political optimisationand economic optimisation. Several schools of thought
were clearly represented in the debates, and a perfectconsensus on potential policies and mechanisms was notto be expected. Nevertheless, the seriousness of GHG
impacts was not in question, and there was substantial
agreement on the research agenda.
First, the responses of different actors to tradable
permit systems deserve serious study. It was pointed out
by one of the commentators that three complex systems
are involved: the level of consumption (including, but
not limited to, mobility); modal shares and shifts; andtechnological innovation (including some sub-systems
beyond transport, such as distributed power generationfrom vehicles). Of particular, but not exclusive, relevanceto technology was the appeal of several speakers to keep
an open mind on the possibility of radically new paths.
Secondly, there is much to do to help consumers at
all levels understand the whole range of external costs,
and why it is often difficult for the market to incorporate
them without government intervention. Where such intervention raises net revenue, transparent mechanisms for
directing the surplus into mitigation actions need careful
design, and careful public communication: for example,
investing a fuel tax into energy efficiency measures caninvolve a multi-step logic that is much harder to explain
than adding road capacity or even planting trees.
Finally, with respect to price effects, the discussion
came back to the chronic nature of the build-up of greenhouse gases, and the acute nature of events that bring thegreatest political leverage. Rather frequent acute climate
events can now be added to acute energy supply events assources of disruption, awareness, and learning. A newunderstanding is needed of cross-elasticities in the short,medium and long term taking into account the effects ofsuch events, which may expose consumers to bidirectional shifts in energy prices, sometimes of surprising
amplitude.
This article can give only a broad sense of the richness of the exchanges at this international colloquium.
However, a book of selected papers and discussions is
expected to be published in 2008.

44IATSS Research Vol.31 No.1, 2007

4. PAPERS PRESENTED AT THE COLLOQUIUM(in addition to oral presentations: see http://www.let.fr/ejc2006/)
Barla, P. Les enjeux liés aux émissions de gaz à effet de serredans l’industrie du camionnage en Amérique du Nord. (Greenhouse gas issues in the North-American trucking industry)
Bauquis, P-R Quelles énergies pour les transports au 21ème
siècle ? (Which energies for transport in the 21st century?)
Bentley, R. The expected dates of global resource-limited production of conventional oil and gas.
Chateau, B. Prospective de la demande de transport pour une
division par 4 des émissions en 2050. (Prospects of achieving a75% reduction in transport emissions by 2050.)
Crozet, Y. Le transport aérien et les permis d’émission : pertinenced’une approche européenne dans une perspective globale.
(Air transport and emission permits: a global perspective on theEuropean approach.)
Fleming, D. Tradable Energy Quotas (TEQs): Pathway for a
Phased Energy Descent?
Friedman, D.J. Opportunities and impacts in the automobile
sectorGodard, O. Transports et développement durable : les conditions
de la compatibilité. (Transport and sustainable development:conditions for compatibility).
Kockelman, K. Credit-based congestion pricing.
Labriet, M. Quelle contribution des nouvelles technologies detransport aux stratégies climatiques à long terme? Modélisation
et analyse technico-économiques. (What is the contribution ofnew transport sector technologies to long term climate policies?
Techno-economic modeling and analysis.)
Lawson, J.J. A North-American viewpoint on regulatory instruments.
Lee-Gosselin, M. What can we learn from the demand restraint
policies of the 1970s and 1980s and public attitudes to them?
Perrels, P. User response and problems of equity with respect tocarbon crediting systems
Rapp, M. Bourse des droits de passage pour la régulation dutrafic transalpin des poids lourds (Exchange of alpine transit rights
for heavy goods vehicles traffic)
Raux, C. Des quotas de CO2 pour le transport de marchandises ? (CO2 quotas for freight transport?)
ten Brink, P. The CO2 Challenge for Passenger Cars in Europe
and the Potential Role and Impacts of Emissions Trading.