Capping transport emissions: A welfare analysis of a personal carbon trading scheme

Abstract

This thesis presents the findings of a study to determine the welfare effects of a personal carbon trading scheme (PCTS) for the transport sector. A PCTS sets a limit on carbon and allocates free permits to all participants. Individuals are then free to trade permits with others in a carbon market creating a monetary incentive to reduce emissions so as to profit from the prevailing market price. The research focused on three areas of interest in determining the welfare effects of a PCTS. The first area estimated carbon emissions associated with road transportation in Ireland. An analysis of the socio-economic characteristics of individuals within a scheme using a logistic regression analysis followed. The second area of the research estimated welfare changes across population density and social deprivation levels. A second logistic regression model determined the socio-economic characteristics of individuals with varying welfare changes and the impact of the aforementioned density and deprivation variables on these welfare outcomes. The final area of research outlined a framework of the potential structure of a PCTS. Based on thisstructure, the outcomes of an initial phase of trading were also predicted.