Exhaust emissions and environmental classifications of cars: what indicators are relevant according to external cost calculations?

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This study is based on the questions raised by Folksam on how well the criteria currently used reflect the total environmental impact of exhaust emissions. One of the questions is whether diesel cars, being more fuel efficient, are preferable to gasoline cars given the differences in for example particle and NO2 emissions. In this paper we give an overview of the method used to calculate the external costs related to the exhaust emissions of cars, the Impact Pathway Approach (IPA). This type of assessment has previously been used to compare the environmental performance of gasoline versus diesel cars in a report by the former Swedish national road administration and in a recent paper on the taxation of cars in Belgium. We also provide an overview of recent research on the inputs used in these calculations. Based on information on emission tests of VW cars and information from the Swedish Transport Administration, we illustrate how different aspects influence the outcome of these calculations regarding exhaust emissions from cars. Regarding the specific question raised in this study about indicators for sustainable cars, we find that the indicators currently used, CO2 emissions, do not reflect the full environmental impact. Different types of vehicle technologies result in different combinations of emissions. With the large variety of car models, and with important differences between type approval and ”real driving” emissions, we conclude that apart from CO2 emissions, vehicle technology should be accounted for in the classification of cars. Concerning the difference between gasoline and diesel vehicles, important aspects to consider are: • differences in emissions of particulates where particle size or number and composition may be important to consider in addition to, or maybe even rather than, mass, • the difference in the ratio between NOx and NO2, as it affects local NO2 and ozone concentrations.

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