Abstract for: Modeling an individual market-based carbon emission reduction mechanism within the Italian private transport sector
Human activities, such as burning fossil fuels for electricity generation, heating, and transport, are the primary drivers of a large amount of greenhouse gases emission. Thus, the active and willing participation of citizens in combatting climate change may be pivotal to checkmate this issue. The present work is aimed at conceptualizing and simulating a market-based incentive mechanism, called BitCO2, to incentive less carbon-intensive consumer choices. This mechanism is tested for the Italian private transportation sector thanks to an ad hoc developed System Dynamics model. The Battery Electric Vehicle (BEV) adoption, if compared with the Internal Combustion Engine Vehicle (ICEV) one, cause less CO2 emissions per km traveled. After a certain number of traveled km, a BitCO2 token is assigned to BEV owners for each ton of CO2 avoided. This token can be exchanged in a dedicated market and used to get a discount on insurance services. Assuming a Social Cost of Carbon of 9.22 [2.13 – 22.3] €/tonCO2eq, model results show that the BitCO2 mechanism would allow for a cumulated CO2 emission reduction of 973 [68.9 – 5’230] ktonCO2eq over 20 years of operation with a peak of 39.3 [5.34 - 189] thousand additional BEV registration per year.