Evaluating spillover effects of the planned zero emission zone in Helsinki on car fleet development
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School of Business |
Master's thesis
Authors
Date
2024
Department
Major/Subject
Mcode
Degree programme
Economics
Language
en
Pages
6+61
Series
Abstract
The city of Helsinki is planning to implement a new zero emission zone (ZEZ) policy, which would restrict driving with internal combustion engine (ICE) vehicles within the geographical area of the city. This thesis contributes to evaluating the welfare effects and the efficiency of the planned ZEZ policy in Helsinki by examining its potential to induce spillovers to vehicle fleets in regions outside the capital. The focus of the paper is on used vehicle trade as a channel for spillovers, but other potential channels are discussed through literature review. The used vehicle trade as a channel is analysed empirically through descriptive analysis on vehicle trade dynamics between Helsinki and rest of the country. More specifically, the analysis compares the characteristics of total domestic regional vehicle imports in Finland with the characteristics of used vehicles imported regionally from Helsinki. As the policy is expected to increase the number of EVs in Helsinki (AEI, 2023), the paper also constructs a scenario model aiming to predict the impact of the ZEZ policy on electric vehicle (EV) and plug-in hybrid electric vehicle (PHEV) fleet development outside Helsinki through used vehicle trade using Markov chain methodology. According to the analysis, used vehicles originating from Helsinki account for only around 9% of the total regional used vehicle imports and imports from Helsinki tend to be less emission intensive compared to used vehicle imports from other regions, inde-pendent of the vehicle age or fuel type. These findings indicate that even if the ZEZ policy would lead to the number of ICE vehicle exports from Helsinki to increase, the net effect of such vehicles on the vehicle fleet development would be positive. The scenario analysis reveals that the policy would slightly increase the size of EV and PHEV fleets outside Helsinki, with most significant increases in rest of Uusimaa, but the effect is too small to significantly accelerate the green transition of vehicle fleets. The overall findings therefore suggest that the policy would likely have a positive net effect on vehicle fleet emission levels and technological composition in regions outside the capital through used car trade. However, the effect would likely not be large enough to cause significant struc-tural changes in the car fleets, due to the relatively small volume of used vehicle imports originating from Helsinki on a national level. Additionally, literature review suggests, that the policy could affect car fleet development outside Helsinki, also through other channels than used vehicle trade, for example through inducing EV charging infrastructure development.Description
Thesis advisor
Liski, MattiKeywords
ulkoisvaikutukset, päästöjen hallinta, autokannan kehitys, liikenteen päästötön alue