Taxes do not reflect the share of greenhouse gas emissions being generated by road transport, aviation and shipping. At the same time, transport tax revenues are being undermined by the switch to electric vehicles, leaving a £28 billion black hole in UK Treasury finances in the coming decades.

Transport taxes could be used much more effectively to steer the UK towards lower carbon transport and protect the public finances. The authors of this paper worked with WPI Economics to model a series of reforms across the road, aviation and shipping sectors.

This report outlines a ‘fair share’ package of tax reform which moves the UK closer to net zero, secures revenues for the Treasury, and works progressively across the income distribution.