Chen, Lichao;
(2026)
Thesis on Environment and Transport Economics.
Doctoral thesis (Ph.D), UCL (University College London).
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Abstract
This thesis examines how supply-side carbon pricing and demand-side purchase sub- sidies reshape market structure and welfare in Europe’s two largest transport sectors: aviation and automobiles. Chapter 1 analyses the European airline industry using a two-stage entry-and-pricing model that captures key institutional features such as airport slot constraints and point-to-point business models. Fixed-cost parame- ters are estimated through a hybrid approach combining moment inequalities with maximum likelihood, ensuring policy simulations remain consistent with observed market structures. The analysis shows that carbon pricing induces asymmetric network adjustments concentrated among low-cost and regional carriers, while full- service groups at hub airports remain relatively resilient. Although industry profits decline, the reallocation of capacity improves allocative efficiency and redistributes welfare unevenly across Europe. Chapter 2 evaluates electric-vehicle purchase sub- sidies in the UK, France, and Germany (2010–2021) using a random-coefficients logit demand model with micro-moment calibration and a static Bertrand pricing framework. The results show that the expansion of the EV market has been driven mainly by product innovation and model fleet turnover rather than by flat purchase incentives. Subsidy effectiveness varies across countries, with limited impacts in the UK and France but stronger effects in Germany. An income-targeted subsidy de- sign achieves similar emissions reductions at substantially lower fiscal cost and with greater equity. Together, the chapters demonstrate that environmental policies op- erate through distinct mechanisms—reconfiguring airline networks and influencing car buyers’ choices—and that well-designed instruments can achieve decarbonisation with higher efficiency and fairer distributional outcomes.
| Type: | Thesis (Doctoral) |
|---|---|
| Qualification: | Ph.D |
| Title: | Thesis on Environment and Transport Economics |
| Open access status: | An open access version is available from UCL Discovery |
| Language: | English |
| Additional information: | Copyright © The Author 2025. Original content in this thesis is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International (CC BY-NC 4.0) Licence (https://creativecommons.org/licenses/by-nc/4.0/deed.en). Any third-party copyright material present remains the property of its respective owner(s) and is licensed under its existing terms. Access may initially be restricted at the author’s request. |
| UCL classification: | UCL UCL > Provost and Vice Provost Offices > UCL SLASH UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS > Dept of Economics |
| URI: | https://discovery.ucl.ac.uk/id/eprint/10220005 |
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