In a new SNS report, Professor Maria Bratt Börjesson shows that several measures seeking to reduce emissions from the transport sector – such as more bicycles and public transport, denser urban areas and working from home – have a relatively limited effect. Fuel taxation, on the other hand, is much more effective, but this sector is already taxed at a higher rate than other sectors and is problematic from a fairness perspective. In the long run, according to Bratt Börjesson, electrification represents the only sustainable solution for transportation on our roads. She suggests that the government should take responsibility for expanding electricity networks along the current road network as well as gradually reducing or redesigning bonuses and tax incentives for electric cars and support for private charging stations.
The reduction in greenhouse gases from the transport sector is currently at a modest level in relation to the Swedish parliament’s target to reduce emissions from this sector by 70 percent. This target, however, will not be achieved with the policies planned or introduced thus far. This reduction has mainly been achieved as a result of using more imported biofuels, while road traffic continues to increase despite high taxes on fuel and significant resources geared towards a plethora of other measures aiming to improve alternatives to road traffic.
Between 2010 and 2018, the number of kilometres driven by passenger cars increased by 9 percent. During the same period, travelling by public transport increased by 29 percent and lorry traffic by 17 percent. In other words, road traffic has not decreased as a result of increased investments in alternatives.
Significant resources are spent on improved alternatives to road transports (i.e., by rail, bicycle and public transport). Other alternatives highlighted in the debate also include virtual meetings and working from home. According to Bratt Börjesson, however, there is little evidence that such measures result in any substantial emission reductions, even though they frequently generate significant utility in the form of welfare and service.
Economic instruments, mainly in the form of fuel taxation, represent the most cost-effective and precise instruments for reducing emissions. Even at this stage, however, road traffic is already paying more for its emissions compared to other sectors. Furthermore, higher fuel taxes affect households with low incomes and travelling long distances, as car travel varies greatly in all income groups and regions.
In order to significantly reduce emissions from road traffic at a reasonable cost for society, a change of fuel is thus needed in addition to, in the long run, electrification. Bratt Börjesson furthermore argues that the current tax revenues from road traffic could probably cover the public costs associated with electrification, despite the subsequent losses from the petrol and diesel tax.
“A prerequisite is that the government’s electric car bonuses are reduced as electric cars become cheaper. Rather, the government should focus on taking responsibility for electrification by expanding electricity networks along our road networks to achieve sufficient electric power. Electric roads may serve as a solution for heavy traffic. The market will not be able to manage this by itself, as electricity networks are characterised by scale and system effects”, says Maria Bratt Börjesson.
Up until the 1980s, it was a matter of fairness that each mode of transport should balance expenditures with revenues.
“In relation to the present context, this would mean that the drivers themselves should pay for electrifying the transport system. However, this would also mean that those using railways and waterways would have to contribute more to the government’s costs for these modes of transport. At the end of the day, however, how the various modes of transport will be financed in the future is ultimately a political question”, says Maria Bratt Börjesson.
This report is published in the framework of the SNS research project Sustainable Urban and Rural Planning.