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The effect of fuel price increases on road transport CO2 emissions

By Simon Virley


In his March 1993 Budget, the Chancellor announced a commitment to increase the real value of road fuel duty in subsequent Budgets as part of a strategy to return UK CO2 emissions to 1990 levels by the year 2000. This paper examines the effect of higher fuel prices on UK road transport CO2 emission using an econometric model of road transport fuel consumption. If the minimum commitments announced in the Budget were adhered up to the year 2000, about 1.5 m tonnes of carbon would be saved, which represents about one-seventh of the overall saving required to meet the Rio commitment.

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