Global Transportation Decarbonization

The benefits of the transportation sector outweigh its environmental costs by orders of magnitude. For instance, transportation is a prerequisite to international trade, and despite generating roughly 2.4 gigatons of CO2 emissions annually-just under 7 percent of total global emissions from fossil fuels and industry-through the geographic redistribution of goods, Shapiro (2016) estimates that gains from international trade outweigh emissions-related climate damages by a factor of 161-to-1. In addition, transportation facilitates the movement of people within and across urban areas, creating benefits for workers and firms and generating distributional benefits for low-income and disadvantaged households by alleviating spatial mismatches between supply and demand in labor markets. Such dramatic differentials in costs and benefits highlight the profound tradeoffs confronted by emissions abatement efforts in the transportation sector. Decarbonization must be implemented in a manner that supports the continued provision of low-cost transportation services, or risk eroding the foundation of the local and global economies.