Documents Energy Economics 2 results

"There is an intense debate over whether fuel economy standards or fuel taxation is the more efficient policy instrument to raise fuel economy and reduce CO2 emissions of cars. The aim of this paper is to analyze the impact of standards and fuel prices on new-car fuel economy with the aid of cross-section time series analysis of data from 18 countries. We employ a dynamic specification of new-car fuel consumption as a function of fuel prices, standards and per capita income. It turns out that standards have induced considerable fuel savings throughout the world, although their welfare impact is not examined here. If standards are not further tightened then retail fuel prices would have to remain at high levels for more than a decade in order to attain similar fuel savings. Finally, without higher fuel prices or tighter standards, one should not expect any marked improvements in fuel economy under ‘business as usual' conditions."

"The scale and patterns of household consumption are important determinants of environmental impacts. Whilst affluence has been shown to have a strong correlation with environmental impact, they do not necessarily grow at the same rate. Given the apparent contradiction between the sustainable development goals of economic growth and environmental protection, it is important to understand the effect of rising affluence and concurrent changing consumption patterns on future environmental impacts. Here we develop an econometric demand model based on the data available from a global multiregional input-output dataset. We model future household consumption following scenarios of population and GDP growth for 49 individual regions. The greenhouse gas (GHG) emissions resulting from the future household demand is then explored both with and without consideration of the change in expenditure over time on different consumption categories. Compared to a baseline scenario where final demand grows in line with the 2011 average consumption pattern up until 2030, we find that changing consumer preferences with increasing affluence has a small negative effect on global cumulative GHG emissions. The differences are more profound on both a regional and a product level. For the demand model scenario, we find the largest decrease in GHG emissions for the BRICS and other developing countries, while emissions in North America and the EU remain unchanged. Decreased spending and resulting emissions on food are cancelled out by increased spending and emissions on transportation. Despite relatively small global differences between the scenarios, the regional and sectoral wedges indicate that there is a large untapped potential in environmental policies and lifestyle changes that can complement the technological transition towards a low-emitting society."