Within the Kyoto Protocol, the European Union has committed itself to substantial reductions in overall CO2 emissions. As an ongoing process, this commitment was broken down into sector and country specific reduction targets. As opposed to power plants and other stationary energy intensive production, the precise form of transport emission regulation is still subject to intensive debates. In the Community strategy to reduce CO2 emissions from passenger cars and to improve fuel economy (COM(95) 689 final), the Community chooses the per-kilometre emissions as one main strategic variable in implementing the CO2 reduction target.

In a voluntary agreement the international automotive industry (ACEA, JAMA, KAMA) committed itself to reduce the CO2 emissions of new passenger cars on average to 140g per kilometre in 2008/2009. For a four year period after the voluntary agreement of the automotive industry, the European Commission intends to limit the emissions of new passenger cars by a political regulation.

This project aimed at an integrated assessment of different policy scenarios on the following three levels: transport system, macroeconomic system and automotive market. For the impact analysis at the transport-sector level the model TREMOVE was used in mandatory. At the macroeconomic level, the dynamic general equilibrium model PACE-T was used to simulate the socio-economic impacts as well as the environmental impacts of the relevant regulation measures. At the level of the individual automotive markets and sub-markets, the subcontractor B&D Forecast used its market analysis and forecasting tools to break down the results for the automotive market as a whole into the impacts on specific segments of the market, as well as on specific car producers and different groups of suppliers.

The results of this project can be divided into two aspects. Firstly, the impact of different policy regulations on economic and transport indicators are small and depend on the expected implementation costs for the automotive industry to reduce CO2 emissions of passenger cars. Secondly, the impact of different CO2 reduction levels on the transport and economic indicators is small.

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