The CO2 Social Cost of Your Average Car

7 min readOct 18, 2018

I think a Don’t-Buy-A-Car Bonus of 5000 Euro would be reasonable. The payout would be as a card for Public Transport (Bahncard 100, Proficard, ÖPNV) or a Bike.

This was posted on Facebook roughly 2 years ago. The idea to transfer money to someone who doesn’t use a car and instead to subsidize her public transport ticket or bike seems almost revolutionary to some. Why should the car driver pay and the non driving person get something for free?

Based on the latest research in regard to the social cost of CO2, let us try to evaluate the above proposition for someone who drives a car.

Next we look if a bonus would be reasonable for someone who can claim to only walk or bike (= no other sources of CO2 in regard to transport).
We exclude public transport (train, tram, bus) as it makes the calculation for this simple exercise too complex.
We also exclude any flights, as planes are the biggest CO2 emitters. In the addendum further below, we show you the calculation for an intercontinental flight, so that you can come to your own conclusions.

But let’s start now with the social cost of an average car over one year.

Average km driven by a personal car (Germany)

Die Gesamtfahrleistung aller Pkw liegt mit 630.5 Milliarden Kilometern (km) in 2017 leicht höher als im Vorjahr (+0,8 %), die durchschnittliche Fahrleistung des Einzelfahrzeugs pro Jahr ging hingegen weiter zurück auf 13'922 Kilometer (-0,7 %).

Verkehr in Kilometern der deutschen Kraftfahrzeuge im Jahr 2017 , Kraftfahrt-Bundesamt

The average distance driven of a german car is: 13'922 km.

CO2 equivalents per km for a sales-weighted average car (USA)

https://pubs.acs.org/doi/ipdf/10.1021/acs.est.6b00177

We assume that in Germany the sales weighted average car CO2 equivalents (= CO2, NO2, CH4 etc.) emissions over the whole lifecycle are similar to the US and are at around 0.310 kg CO2 per km.
If the lifecycle CO2 emissions per km would differ significantly, we would need to adapt the calculations. Let us know if you have better lifecycle data.

Annual CO2 Equivalents per car (Germany)

13'922 x 0.310 kg = 4315.82 kg = 4.32 tons of CO2 (tCO2)

Median Social Cost of a ton of CO2 (tCO2)

Central specifications show high global SCC values (median, US$ 417 per tonne of CO2 (tCO2); 66% confidence intervals, US$ 177–805 per tCO2) and a country-level SCC that is unequally distributed.

Country-level social cost of carbon in Nature, October 2018
See also: One of the authors explaining it further on Twitter

If we take the same median, in Euro this would currently be Euro 360.50.

Note:
The price of US$ 417 per tCO2 is still significantly lower than the price of sucking CO2 out of the air. Climeworks has a current price of US$ 600 per tCO2. In a recent paper from Nature, the possibility of lower prices have been announced. This video with Jennifer Wilcox explains what it means to suck CO2 out of the air.

For comparison, the United Nations report estimated that governments would need to impose effective carbon prices of $135 to $5,500 per ton of carbon dioxide pollution by 2030 to keep overall global warming below 1.5 degrees Celsius, or 2.7 degrees Fahrenheit.

Annual Median CO2 Social Cost for a german car

4.31582 x 360.50 = € 1555.85 (US$ 1800) per year

So we conclude that social cost for an average driven sales weighted car comes to 1556 Euro (or US$ 1800) per year.

Note:
If you drive a Tesla today, you’ll get about half of that amount: € 803 ($ 923).
(13'922 x 0.160 kg = 2.22752 tC02; 2.23 x 360.50 = € 803)

Bonus for someone who only walks and bikes

The bonus per year for someone who stops driving a car and only walks and bikes would therefore be of the same amount minus the CO2 cost to produce a bike. We assume that people will not change their diet because they bike, but simply that they would become healthier.
As for the production of one bike: we have seen numbers from 115 kg to 530 pounds up to 0.9 tons of CO2. So let’s assume a high number of 1 ton of CO2 to produce a bike.

1555.85–350.50 = € 1205.35
Bonus: € 1205.35 in the year buying the bike, € 1555.85 in the others.

Seen over a 10 year period (with one bike), the CO2 bonus payout would be € 15'208.-

A bonus of € 5000 could be paid the first time after 3.44 years (3 years and 160 days), and then every 3.21 years (3 years and 78 days) to someone who can prove that she only walks and bikes.

This would be the most straightforward incentive to refrain from emitting CO2 in regard to transport.

Note:
Here we only look at the social cost of CO2 and exclude all other social costs like damage to others (injuries, death, material destruction), noise, health penalties for the driver, space occupation while driving or parking etc.

Note 2:
Currently France does gives out a bonus for bikes, but they only pay out 20% of the bike’s price or at most Euro 200.
On the other hand, if you buy an electric car which, as we have seen, does still generate 1.5–2 tCO2 per year, you will get a bonus of € 6000.
In this regard, see also: Climat : pourquoi la voiture électrique n’est pas la solution
In Norway, the subsidy of electric cars, also created wrong incentives.
A recent paper, titled: The Norwegian support and subsidy policy of electric cars. Should it be adopted by other countries? came to the following conclusion:

One of the most worrying aspects of the current EV policy incentives in Norway is that they motivate high-income families to buy a second car. At the moment, two-car households make up a minority. However, if two cars per household become more common, they will pose an environmental challenge across several dimensions and will doubtless mean that the EV policy as a GHG emission reduction instrument is totally missing its point.
Under certain reasonable assumptions, we then find that the EV subsidy package that the single EV owner gains amounts to about 13,500 USD/tCO2.
Our main conclusion is that the Norwegian EV subsidy policy should be ended as soon as possible, and that this policy certainly should not be implemented by other countries. The solution to the GHG problem of the transportation sector in the next few decades in a world in which the GDP and population growth are the main drivers of the road traffic volume (Bosetti and Longden, 2013) is not to offer subsidies making it cheaper to buy and run EVs, or other alternatives, but to introduce more taxes and restrictions on car use. There are simply too many social costs associated with car transportation (Sterner, 2007). The subsidization idea, which informs so much of environmental policy today, not least within Europe, is ineffective, has several unintended consequences and will in many cases be counterproductive (Helm, 2012).

Conclusion

Subsidies and social cost offsets are the two main ways to radically change behavior. In the first case we pay out money to someone who doesn’t create the social cost in the first place.

Current subsidies to buy electric cars are high, but do not solve our CO2 emissions problems and can even have unintended and counterproductive consequences, as has been shown in Norway.

If we want to radically lower our CO2 emissions, our first duty should be to increase walking and cycling significantly. With subsidies in the range of
€ 1200-1500 per person per year, we could create a strong incentive to switch.

In the opposite case, we offset monetarily the social cost for people who want to drive. People have to start paying for the externalities they create. Owner of cars which produce more CO2 will have to pay more, which might also stop the pernicious trend to always heavier and bigger SUVs.

This money can then be reinvested either
a) directly to subsidize the people that do not drive or
b) in projects that increase mobility with significantly less CO2 emissions or
c) to suck out the CO2 from the air.

From all these reinvestments individuals, as well as the general population will benefit rapidly. And this might have the most significant impact. If you see, that positive change is possible, people will adopt change.