This research investigates if the stringent 2020 and 2050 overarching CO2 mitigation objectives set out by the European Union dominate its 2010 to 2020 targets specific to the transportation arena, specifically its biofuel penetration objectives and gram CO2
per kilometre emission caps. Using a dynamic recursive general equilibrium model, IMACLIM‐R, we demonstrate that these overarching targets do not dominate the interim transportation targets when the carbon policy triggering compliance with the mitigation objectives boils down to the theoretical least‐cost option of uniform carbon pricing. Ground transportation is confirmed as quite insensitive to high carbon prices, even when such prices are applied over a long term. It is tempting to conclude that pursuing the mitigation objectives specific to transportation will impose unnecessary costs. However, because of the second best conditions prevailing in actual economies, and of the risk of lock‐in in carbon intensive trajectories, we conclude with the urgent need for some ambitious transport‐specific policy design research agenda.
