User response and equity considerations regarding emission cap-and-trade schemes for travel

In most countries with greenhouse gas emission reduction commitments, transportation has been relatively spared, thus, far in the targeting of reduction obligations, owing to the supposedly high marginal cost. With the prospect of tightening reduction targets, pressure is, however, mounting to address transportation more seriously in the near term and not to rely solely on medium to long-term breakthroughs of alternative fuel technologies. This means stricter policies at the demand side of the mobility market. In addition to fiscal and spatial policies, cap-and-trade systems have been put forward as a new option that deserves serious consideration. This paper reviews the possibilities and pitfalls of such a system applied to passenger transport. Key concerns are the transaction costs of the system and trade-offs between transaction cost and equity effects. A simple system with low(er) transaction cost is more likely to invoke politically sensitive equity effects. On the basis of the recent upsurge in monitoring and feedback studies, one may also conclude that the organisation and tailoring of the information interfaces for the household/traveller requires still elaborate study and testing.