Municipal emissions trading: reducing transport emissions through cap-and-trade

A novel approach is described for limiting transport emissions through a cap-and-trade emissions trading scheme, whereby local governments would be the participants of emissions trading. It is proposed that emissions trading for passenger road transport has the effect of channelling the carbon costs away from fuel prices to land use costs. A `municipal emissions trading scheme' could achieve this - local governments would have to cover vehicle traffic emissions generated by homes, businesses and industry on their territory. Municipalities are able to participate in an emissions trading scheme because they have planning control over development on their territory, and could control the amount of future vehicular traffic. Through planning, municipalities have access to a wide range of strategies to minimize transport emissions. Municipal emissions can be calculated as a share of total national road transport emissions with the help of a gravity model of traffic attraction. A municipal emissions trading system would result in capping and controlling passenger road transport emissions, not through raising fuel prices or importing credits, but by enforcing prudent and climate-efficient urban planning practices.