Increased fuel tax or levy, fuel subsidy removal: How do pricing measures in the transport sector influence greenhouse gas emissions? INFRAS developed a guidance that allows policymakers and practitioners to estimate the impacts of transport pricing policies – in particular with respect to developing countries. With the simplest approach of the guidance, countries can estimate a reduction in fuel consumption through a tax increase based just on the current consumption and a related default price elasticity. The Transport Pricing Guidance provides a step by step calculation method alongside practical examples, gives instructions for making appropriate assumptions and offers specific recommendations in terms of reporting.
Background: Countries that ratified the Paris Agreement are required to report regularly on their emissions and the success of their implemented measures. A series of guidances developed under the Initiative for Climate Action Transparency (ICAT) are meant to support countries with their reporting. In this context, INFRAS has developed the methodologies for the Transport Pricing Guidance on behalf of Verra (formerly VCS) and has been in the lead of the technical working group.
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