Sustainability of energy management of transport sector in Hungary Katalin TANCZOS, Agnes KOSZTYO, Adam TOROK Abstract: The high ratio of road transportation in CO 2 emission caused by humanity made the research of relation between the road transportation and climate change reasonable. There is a justifiable demand by the society to moderate the environmental impacts caused by road transportation. Our aim is in this article to monetarise the impact caused by the road transport sector in Hungary. First we analysed the fuel consumption in Hungary then tried to estimate the carbon dioxide emission from these time series. According to the recent finalised EC founded research projects we tried to monetarise the impact of the transport sector on the climate. This is the monetarised value which has been paid by the society and not by the sector. Keywords Fuel consumption, transportation, carbon dioxide emission, climate change. 1. Introduction There is a strong relation between economical activity and motorization. Although until now it has been unclear, weather the increase of economical activity affects motorization or the increase transport demand induces the economical activity. One effect is clear, the increase of motorization affects our environment, and there is a loop back, our environment has an effect on transportation. I have analysed the relation between the environment, the economy and motorization. I have begun with Simon Kuznets’ (1901-1985) work: Katalin TANCZOS: DSC, Head of Department of Transport Economics,Budapest, Hungary, (tel: +36 (1) 463-1008 fax: +36 (1) 463-3267 email: ktanczos@kgazd.bme.hu); Agnes KOSZTYO: Research Fellow, Department of Transport Economics, Budapest, Hungary (tel: +36 (1) 463 1061 fax: +36 (1) 463 3267 email: akosztyo@kgazd.bme.hu) , Adam TOROK: PhD Student, Department of Transport Economics, Budapest, Hungary (tel: +36 (1) 463-1061 fax: +36 (1) 463-3267 email: atorok@kgazd.bme.hu) ( 0 2 2 1 0 ln ln ln ε α α α = t t t LAK GDP LAK GDP Y (1) where: Y: environmental pollution [CO 2 kg/person], t: years, GDP: Gross Domestic Product, LAK: inhabitants, α i : weights, a 1 <0 and a 2 >0 and a 3 ≥0, ε 0 : error. I have added the degree of motorisation to provide a link between environmental pollution, economical activity and motorization: ( 1 3 2 2 1 0 ln ln ln ln ε α α α α = t t t t LAK MOT LAK GDP LAK GDP Y (2) where: Y: environmental pollution [CO 2 kg/person], t: years, GDP: Gross Domestic Product, LAK: inhabitants, α i : weights, assumeing that a 1 <0 and a 2 >0 and a 3 ≥0, MOT: number of private cars, ε 1 : error. I could prove with the extended Kuznets model that the dramatically increasing motorisation is a determining part of environmental pollution. I have compared the results of the extended Kuznets model with a multi-linear model: ( 2 2 1 0 ε β β β = t t t LAK MOT LAK GDP Y (3) where: Y: environmental pollution [CO 2 kg/person], t: years, β i : weights, assuming that β 0 ≠0, GDP: Gross Domestic Product, LAK: inhabitants, MOT: number of private cars, ε 2 : error. Having linearised the problem the effect of motorisation on environmental pollution became more significant.