The cost and effectiveness of policies to reduce vehicle emissions : report of the one hundred and fourty second Round Table on Transport Economics held in Paris, 31 January - 1 February 2008.

Policies that reduce fuel consumption such as fuel taxes and fuel economyregulations are in place in many countries including the USA and Europe. Whether such a combination of instruments is justified was debated by the OECD Joint Transport Research Centre Round Table, who also considered whether current policies and the level of taxes and standards are in line withsocietal climate change mitigation goals. Effective policy packages to reduce greenhouse gas emissions from road transport are discussed. A clarification is given of the effects of marginal external costs on policy design, and of instrument choice in relation to economic costs and political expediency. Ways of influencing vehicle purchase decisions are considered. Issues to be taken into account when designing a fuel economy standard are discussed. The reasons for discrepancies between test cycles and on-road fuel economy are described. There was considerable consensus but no unanimity, that pursuing climate change goals will require greenhouse gas abatement efforts in the transport sector, and that a combination of incentive-based instruments and regulation of fuel economy is appropriate. The merits of taxation and permit systems for reducing greenhouse gas emissions are discussed. More research into policy is considered necessary.