Developing policy packages for low-carbon passenger transport: A mixed methods analysis of trade-offs and synergies

Transformation to climate neutrality of the transport sector raises multiple challenges at a time, with potentially conflicting objectives and further external effects. This calls for a balanced policy package of which empirical assessment is needed in order to i) quantify its effectiveness and ii) reveal effects of potential overlaps and interactions associated with individual measures within the package. This paper analyses the economic, environmental and distributional effects of a policy package that supports low-carbon passenger transport in Austria, co-developed with policy experts and stakeholders. The package includes hard measures such as a mandated phase-out of conventional cars and explicit road pricing, as well as soft measures to foster the uptake of public transportation. To assess these packages we make use of a computable general equilibrium model for Austria that incorporates heterogeneous household groups, CO2 emissions and a detailed representation of the transport sector. We show that the decoupling of economic welfare and negative external effects of passenger transport is possible with a balanced policy package. Our analysis also highlights potential urban-rural conflicts, regressive impacts and negative public budget implications of single policy measures, issues that the suggested policy package as a whole can mitigate.