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23 October 2019

Economists favor progressive restrictions over bans in cutting transport emissions

A group of economists tasked by the Finnish Ministry of Transport and Communications to investigate the efficacy of financial instruments in the reduction of emissions strongly counsels against outright bans of single technologies—internal combustion engines in this case. The economists favor, instead, an approach built on increasing emissions restrictions and a state-operated emission permit auction which requires fuel providers to purchase permits for the sales of fuels. The price of these permits would then lead to an increase in the price of fuel, thereby organically incentivizing consumers to reduce their consumption of more heavily-polluting fuels. Through this approach Aalto University professor of Economics Matti Liski, leader of the research group, estimates that transport emissions in Finland could be cut in half by 2030. Furthermore, this approach does not rule out surprises in the unpredictable evolution of sustainable mobility technology, allowing for the development of fuel-cell cars to overtake the more costly electric alternative to accelerate the transition to more sustainable mobility.

Read more about the study