How to decarbonise EU road transport without summoning the gilets jaunes

Extending carbon pricing to road transport will initially make driving more expensive, hurting poorer households. To avoid political backlash, the European Commission should pre-emptively neutralise the regressive impacts of decarbonisation.

Without decarbonising transport, the EU will not be able to reach its climate neutrality target by 2050. Transport is the largest source of greenhouse gas (GHG) emissions in the EU after energy generation. It accounts for over a quarter of GHG emissions and is the only sector in the EU that has seen emissions increasing since 1990. Cars and trucks are responsible for about two-thirds of transport emissions, and decarbonising them is hard: it requires fundamental changes to behaviour, technology and infrastructure. If moves to decarbonise road transport are not handled carefully, they will make it more expensive, disproportionately hurting poorer households and those who live in remote places until low-carbon options become wide-spread and affordable for all. To get it right, policy-makers need to invest in infrastructure and create strong incentives to change behaviour and to innovate, while keeping mobility affordable.

The EU raised its climate targets through the recently approved European Climate Law, aiming to reduce EU-wide GHG emissions by at least 55 per cent in 2030 relative to 1990 levels, and to achieve net zero GHG emissions in 2050. The EU’s 2020 climate target was mainly achieved by curbing GHG emissions from power generation, but achieving future climate targets requires EU member-states to tackle emissions in sectors that have proved harder to decarbonise. Road transport is one such sector: to decarbonise it, European governments will need to send credible price signals to businesses and households, to invest in low-carbon mobility and to tighten emission standards.

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