Using Cap and Share to control Irish road transport emissions

This short paper suggests that Ireland should reduce its road transport emissions using Cap and Share, as a more focussed alternative to a carbon tax. The advantages of using this approach are included below or you can download the entire paper.

The advantages of using C&S are:

  1. It is quick, easy and cheap to implement and then to run.
  2. Because everyone gets the same allocation, it would be seen as fair.
  3. It automatically protects the less well-off. As the cap tightens, the price of the right to emit a tonne of CO2 will rise. This will increase the price of motor fuels, freight and passenger transport tickets. However, the public will automatically receive full compensation for these rises from the sale of their certificates, thus avoiding knock-on inflationary effects. Anyone whose lifestyle requires less transport than the national average will come out better off.
  4. C&S was presented to the Department of Transport two months’ ago at a meeting of the Senior Managers’ Forum. As a result, the Department has said that it will include it as an option in the forthcoming Green Paper on Sustainable Transport.  Comhar is proposing to commission research into the economic effects of using C&S in the way outlined above and has approached the Sustainable Development Commission in Britain proposing that all Ireland be covered by the study.  The UK Department for Transport is attracted by the idea after hearing about it at a conference in London.
  5. It would be possible to include heating oils, gas and domestic coal in the same system, so that all Irish emissions were controlled – industry’s by the present ETS, and the consumer’s by Cap and Share.
  6. In comparison with the introduction of a carbon tax, it would have minimal effects on the cost of doing business in Ireland.
  7. It is a novel Irish idea which is almost certain to be adopted in Europe if taken up here, earning the country  praise and prestige that came with the plastic bag tax and the smoking ban.

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