Critical Issues in Environmental Taxation series
Edited by Larry Kreiser, Ana Yábar Sterling, Pedro Herrera, Janet E. Milne and Hope Ashiabor
Chapter 4: Territorial differences for transport fuel demand in Spain: an econometric study
The level and trends of fuel consumption in passenger transport plus the reliance on fossil fuel energy sources in this sector is a major concern nowadays in many countries, especially due to its contribution to the problems of security of supply (fossil fuel dependence) and CO2 emissions. Although there are alternatives to oil, such as biofuels, they still represent a negligible fraction of total fuel consumption in this sector and they are likely to remain a small share in the near and medium term (IEA, 2011).1 Thus, reducing oil consumption in this sector is inescapable in order to reduce the associated energy dependence and climate change problems. This is also the case in Spain, a country whose oil dependence in the transport sector is as high as 99 per cent. For energy policy, environmental regulation and urban planning, it is worth understanding how fuel prices influence passenger transport and its modal split (Bruhova and Bruha, 2007). Several policies have been suggested to encourage the technological and behavioural changes leading to a reduction in fuel consumption in transport. Economists have highlighted the role of economic instruments, namely fuel taxes, on the grounds of economic efficiency.
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