Research

Peer-reviewed article in Energy Policy

Taxes, tolls and ZEV zones for climate: Synthesizing insights on effectiveness, efficiency, equity, acceptability and implementation

John Axsen, Michael Wolinetz

July, 2021

Highlights

  • Review of road pricing potential for deep GHG mitigation goals

  • Also consider efficiency, equity, acceptability and implementation

  • Stringent pricing can be effective, though ZEV zones uncertain

  • Careful design can improve equity and acceptability

  • Interaction oriented implementation is recommended

Abstract: We explore the potential role of road pricing in achieving deep GHG mitigation targets, including cordon zones, fuel taxes, VKT fees, and ZEV zones. While most research focuses on a single policy criterion, our comprehensive framework seeks to synthesize insights on five criteria: effectiveness (GHG mitigation), efficiency, equity, political acceptability, and implementation process. Further, we address potential policy mix interactions, and identify critical gaps to guide future research. Although results vary by region, we offer some general findings. First, stringent road pricing can be effective for GHG mitigation in the short- and long-run, especially for passenger vehicles (less so for freight), while also playing a complementary role to vehicle efficiency regulations (mitigating rebound effects). Second, both equity and political acceptability can be improved by careful design of exemptions and usage of revenues – though the ideal design seems to vary considerably by region. Finally, the implementation process is highly important for acceptability, which should include stakeholder consultation, clear communication of benefits, potentially a demonstration and referendum phase, and ideally agreement among political parties. There is much less evidence for ZEV zones, which don’t seem necessary for GHG mitigation, though offering ZEV exemptions for road pricing may be an effective design feature.

This figure from the study shows acceptance by road pricing type.

To learn more about this research, please contact Michael Wolinetz.

Other Research

Axsen, J., M. Wolinetz. 2021. Taxes, tolls and ZEV zones for climate: Synthesizing insights on effectiveness, efficiency, equity, acceptability and implementation. Energy Policy, 156. Learn More ➥

Melton, N., J. Axsen, & B. Moawad. 2020. Which plug-in electric vehicle policies are best? A multi-criteria evaluation framework applied to Canada. Energy Research & Social Science 64, 1-15. Learn More ➥

Melton, N., J. Axsen & S. Goldberg. 2017. Evaluating plug-in electric vehicle policies in the context of long-term greenhouse gas reduction goals: Comparing 10 Canadian provinces using the PEV policy report card. Energy Policy, 107, 381-393.

Bataille, C. & N. Melton. 2017. Energy efficiency and economic growth: A retrospective CGE analysis for Canada from 2002 to 2012Energy Economics, 64, 118-130.

Wolinetz & Axsen. 2017. How policy can build the plug-in electric vehicle market: Insights from the REspondent-based Preference And Constraints (REPAC) model. Technological Forecasting and Social Change 117: 238-250. Learn More ➥

Melton, N., J. Axsen & D. Sperling. 2016. Moving beyond alternative fuel hype to decarbonize transportationNature Energy, 1, 16013. Learn More ➥

Bataille, C., N. Melton & M. Jaccard. 2015. Policy uncertainty and diffusion of carbon capture and storage in an optimal region. Climate Policy, 15(5): 565-582.

Jaccard, M., N. Melton & J. Nyboer. 2011. Institutions and Processes for Scaling Up Renewables: Run-of-River Hydropower in British Columbia. Energy Policy, 39(7): 4042-4050.

Peters, J., C. Bataille, N. Rivers, & M. Jaccard. 2010. Taxing Emissions, Not Income: How to Moderate the Regional Impact of Federal Environment Policy. C.D. Howe Institute, 314: Toronto, ON.