Zero fare, cleaner air? The causal effect of Luxembourg’s free public transportation policy on carbon emissions

In March 2020, Luxembourg became the first country to make public transport free. We use this unique setting to evaluate the policy’s impact on carbon emissions. Synthetic difference-in-differences allows us to identify a suitable control group. We use spatial emissions data to construct a panel of NUTS 2 control regions in the EU from 2016 to 2021. Our estimates indicate an average reduction of around 8% in road transport CO2 emissions. We account for potential confounders, such as the COVID-19 pandemic, shifts in commuting behaviors and advancements in vehicle technologies. Robustness checks support the credibility of our results.

Recommended citation: Eibinger, T. and Sachintha, F. (2024). "Zero fare, cleaner air? The causal effect of Luxembourg's free public transportation policy on carbon emissions" Working Paper. https://eibinget.github.io/files/zerofare.pdf