1st August 2005 - Trucost Sector Report - Climate Change and the UK Road Transport Sector

This Trucost Sector Report analyses the impact of the UK Road Transport sector on climate change.

Summary:

The transport sector is a significant contributor to carbon dioxide emissions worldwide. Globalisation has led to long and fragmented supply chains. Road transport dominates the UK transport sector. Road transport is responsible for 26% of UK carbon dioxide emissions. Fuel in the UK is heavily taxed when compared to Europe as a whole. Fuel taxes paid by the UK road transportation sector exceed the environmental damage costs of its carbon dioxide emissions by a factor of 2.6 times. This means that the scope to increase fuel taxes to reflect climate change concerns is limited by the competitive disadvantage that UK operators would face. External congestion costs for Heavy Goods Vehicles (HGV) are about twice as high as the damage cost of all HGV emissions. This is why the UK Government has been developing the Lorry Road User Charge (LRUC). The LRUC has now been subsumed into the proposals for road charging for all UK vehicles. This means that road charging for lorries will not be implemented before 2010-15. Rail freight could be developed through infrastructure investment but currently faces severe capacity constraints. Alternative fuel types, hybrid technology and fuel cells are the most promising solutions to transport-related carbon dioxide emissions.

Key Findings:

- Road transport is responsible for 26% of UK carbon dioxide emissions
- Carbon dioxide emissions account for 75% of the environmental damage from pollution caused by operating the UK road sector
- Heavy Goods Vehicles (HGVs) fuel taxes are roughly equivalent to their social costs (emissions, noise and accidents). External congestion costs for HGVs are about twice as high as the damage cost of all HGV emissions.
- Competitive concerns limit scope for further fuel tax increases as a means of reducing carbon dioxide emissions
- The best environmental outcome would be achieved by road user charges combining with fuel taxes rather than replacing them
- Has the Lorry Road User Charge been scrapped because of cost, complexity and climate change concerns?

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