Welfare Implications of a Carbon Tax in a Long-Distance Passenger Market

Résumé

This study estimates the impact of a carbon tax on welfare, considering modal shifts to less carbon-intensive transport, as well as its effects on environmental and fiscal externalities. We calibrate a modal competition model using logit demand functions for a specific long-distance connection in France and simulate the introduction of a Pigouvian tax. Our key findings are: First, a €190/tCO2 carbon tax is nearly welfare-neutral but significantly detrimental to consumer surplus; Second, rail price regulation has the side effect of reducing greenhouse gas emissions by subsidizing the cleanest transport mode; Third, the widespread adoption of electric vehicles enhances overall welfare without significantly harming consumer surplus.

Mots-clés

Codes JEL

Référence

Marc Ivaldi, Frédéric Cherbonnier, Catherine Muller-Vibes et Karine Van Der Straeten, « Welfare Implications of a Carbon Tax in a Long-Distance Passenger Market », TSE Working Paper, juillet 2025.