Balancing Environmental, Fiscal, and Welfare Impacts of Transportation Decarbonization in France

July 12, 2024

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Format: Chicago

Nate Vernon-Lin. Balancing Environmental, Fiscal, and Welfare Impacts of Transportation Decarbonization in France, (USA: International Monetary Fund, 2024) accessed December 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

France has taken a leadership role in global mitigation and made significant progress towards reducing greenhouse gas emissions, but further efforts will be needed to meet domestic mitigation targets. Accelerating emissions reductions from road transportation will be a key part of this strategy, as they account for nearly one-third of national emissions. At the same time, with the shift to more lightly taxed electric vehicles over the next decade, fiscal revenue from the sector is projected to decline and externalities, such as congestion, to worsen. Building on existing policies, a comprehensive reform that combines revenue-neutral continuous feebate schemes with a gradual introduction of road user and congestion charges could support mitigation targets, while maintaining revenue and regulating externalities. This paper discusses administratively feasible options to introduce such policies as well as key welfare and distributional considerations.

Subject: Congestion tax, Environment, Fuel tax, Greenhouse gas emissions, Taxes

Keywords: Climate change, Congestion, Congestion tax, Decarbonization policy, Efficient fuel prices, Environmental policy, Europe, Fiscal, France, Fuel tax, Global, Greenhouse gas emissions, Policy conclusion, Road transportation economics, Road transportation policy, Road transportation sector policy, Transportation sector emission

Publication Details

Pages:

44
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2024/145
Stock No:

WPIEA2024145
ISBN:

9798400282508
ISSN:

1018-5941

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