ECLIPSE - Evaluating Climate Policy Spillovers in the Transport Sector using Structural Econometric and Equilibrium Models

• Applicant: Dr. Anna Straubinger
• Subject Area: Economic Policy, Applied Economics ; Traffic and Transport Systems, Intelligent and Automated Traffic
• Term: since 2025
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 562513065

The transportation sector is responsible for 20% of global greenhouse gas emissions. Policy makers have therefore implemented various transport-related climate policies that are often limited to specific markets or regions. While effects of such policies on supply and demand within targeted market(s) are already well understood, their indirect effects—commonly referred to as spillover effects—are less frequently studied. Spillover effects arise when policies alter relative prices, supply, or demand across related (up- or downstream) markets or neighbouring regions that are not directly regulated. Examples of policies creating spillovers could be measures promoting electric vehicle (EV) adoption, such as subsidies and emissions standards. These measures directly affect EV costs and supply but also increase electricity demand, impacting the energy market. Additionally, they can alter travel behaviour, leading to longer commutes or relocations. Transport policies may also create spatial spillovers. Car-free zones, for instance, increase amenities but shift traffic to nearby areas. On a broader scale, CO2-based car taxes in the EU can drive cross-border vehicle imports, altering firm pricing strategies and consumer behaviour across countries. Ignoring spillovers across markets and space in policy evaluations can result in an under- or overestimation their impact on emissions and welfare, leading to suboptimal designs and unintended consequences. This project aims to answer the following research questions: How do spillovers across regions or markets of transport-related climate policies impact consumer welfare, greenhouse gas emissions, and firm performance? How should policies to decarbonise urban mobility and specifically cars be designed to take account of these spillovers? We use structural econometric and simulation-based equilibrium models that are extraordinarily well suited to study the spillover effects of transport-related climate policies across markets and regions. The complementarity in our methods enables us to make both a methodological contribution and derive policy-relevant insights that allow decision makers to design climate policies in the transport sector more efficiently by taking into account spillover effects. We use estimates from structural econometric models for the calibration of the structural equilibrium models to integrate the two approaches. Vice-versa the results of the equilibrium models inform the structural econometric models on important substitution patterns that warrant careful modelling.

• DFG Programme: Research Grants
• International Connection: France, Netherlands, Spain
• Co-Investigator: Professor Dr. Sebastian Rausch
• Cooperation Partners: Michela Bonani, Ph.D.; Professorin Isis Durrmeyer, Ph.D.; Pascal Heid; Professor Dr. Hans Koster; Professor Mathias Reynaert, Ph.D.