REGULATING CARBON EMISSIONS IN THE TRANSPORT SECTOR: POLICY INSTRUMENTS, COMPLIANCE MECHANISMS, AND DECARBONISATION PATHWAYS

Abstract

The transport sector continues to rely on fossil fuels, and faces increasing demand for passengers and freight, coupled with a reliance on long-lived infrastructure and is still a significant contributor to global carbon emissions. This review looks at the policy instruments, compliance mechanisms and decarbonisation pathways in play for the transition to lower carbon transport in the road transport sector, in aviation, maritime shipping, freight transport and urban transport. It takes into account regulatory and economic policy actions such as carbon pricing, emissions trading, vehicle and fuel standards, incentives for electric vehicles, low carbon fuel standards and infrastructure support. The review also assesses the effectiveness of the monitoring, reporting, verification, lifecycle carbon accounting and enforcement measures in ensuring the credibility, comparability and measurability of emission reductions. There is evidence that electrification is an attractive option for road transport, and that it can be good for passenger vehicles, provided that it can be powered by low carbon electricity and charging infrastructure is in place. More challenging sectors such as aviation, shipping and some freight are more likely to need a mix of efficiency measures, sustainable fuels, hydrogen fuels and other fuels. Effectiveness of policy is different from country to country due to the institutional capacity, energy system, infrastructure, affordability and market readiness. Policy frameworks that are coordinated, flexible and enforceable will be crucial to support deep decarbonisation, ensuring that policy frameworks are aligned with technological change, clean energy and infrastructure investment and transparency of compliance systems.