Applying Greenhouse Gas Emissions Trading to the Light-Duty Vehicle Sector

The threat of global climate change induced by human production of greenhouse gases is becoming more intensely debated every year. With international agreement on the Kyoto Protocol in December 1997, nations are beginning to assess their options to meet the commitments that they have made. In terms of greenhouse gas emissions control, the passenger vehicle sector presents a significant challenge. Every liter of gasoline burned produces approximately 2.3 kg of carbon dioxide, the most common greenhouse gas. Although all known methods of greenhouse gas emissions control come with some associated costs, a properly designed emissions trading system is a promising policy tool to deal with this increasingly significant environmental problem in a costeffective manner. The issues involved with measurement of the greenhouse gases produced by passenger vehicles and their incorporation into an intersectoral emissions trading system were investigated. It is suggested that direct emissions measurement may not be necessary for these vehicles to participate in such a program, and an alternate emissions estimation methodology is described. Finally, an emissions trading implementation plan is discussed. By that plan vehicle manufacturers are given credit or responsibility for the greenhouse gas emissions of the vehicles that they sell, with the emissions annualized over the projected lifetime of the vehicles.