Compared to road and air transportation, rail transportation is the more environmentally friendly means of travel. In intermodal competition, however, regulations on the tax burden imposed on means of transportation are inconsistent. This unequal treatment results from the use of different "fuels" to provide transportation services. Whereas rail transportation is, in particular, subject to emissions trading and the tax burden imposed on it includes – in analogy to road transportation -  petroleum tax, air transportation has so far been entirely exempt from fuel regulations.
In early 2008 the European Council, the European Parliament and the Commission agreed to include air transportation in EU-wide emissions trading. According to current plans, however, certificates will be issued to air transportation largely free of charge, whereas rail transportation has to bear the entire burden of electricity prices, which are on the increase due to emissions trading.
The study aims at analyzing the impact of the expected regulations, from the point of view of efficiency as well as concerning relative competition among rail transportation and other means of travel, such as air or road transportation.  In addition, the implications for CO2 emissions are presented. A further section examines to what extent it is feasible to cushion the impact of a possible distortion of competition which conflicts with environmental policy intentions.

Selected Publications