Can Vehicle Efficiency Beat Fuel Efficiency in Cutting Fuel Use?

Research output: Working paperDiscussion paper

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Abstract

This paper demonstrates the importance of considering both energy and non-energy efficiency improvements in the provision of energy intensive household services. Using the example of private transport, we analyse whether vehicle efficiency can beat fuel efficiency in cutting fuel use. We find that this ultimately depend on the elasticity of demand for transport, the substitutability between vehicles and fuels and the initial share of fuel use in private transport. The framework also allows to identify 'multiple benefits' of technical progress in private transport by considering both the ability of such policy to reduce fuel demand and to increase the consumer's surplus. We extend the partial equilibrium framework by using computable general equilibrium (CGE) simulations to identify the system-wide impacts on total fuel use of the two alternative efficiency changes. Simulation results suggest that the substitution effects identified in the partial equilibrium analysis are an important element in determining the change in total fuel use resulting from these consumption efficiency changes. However, the identification of associated changes in intermediate fuel demand, plus the potential expansionary effects of the improvements in household efficiency transmitted through the labour market can generate general equilibrium effects that vary substantially from those derived using partial equilibrium analysis.
Original languageEnglish
Place of PublicationGlasgow
PublisherUniversity of Strathclyde
Pages1-40
Number of pages40
Publication statusPublished - 1 Feb 2018

Publication series

NameDiscussion Papers in Economics
PublisherUniversity of Strathclyde
No.18-02

Fingerprint

Fuel efficiency
Elasticity
Substitution reactions
Personnel
Partial equilibrium
Efficiency change
Simulation
Household
Equilibrium analysis
Fuel demand
Energy
Substitution effect
General equilibrium
Elasticity of demand
Labour market
Technical progress
Substitutability
Consumer surplus
Computable general equilibrium

Keywords

  • energy-services
  • technical progress
  • energy efficiency
  • partial equilibrium
  • general equilibrium

Cite this

Figus, G., & Swales, K. (2018). Can Vehicle Efficiency Beat Fuel Efficiency in Cutting Fuel Use? (pp. 1-40). (Discussion Papers in Economics; No. 18-02). Glasgow: University of Strathclyde.
Figus, Gioele ; Swales, Kim. / Can Vehicle Efficiency Beat Fuel Efficiency in Cutting Fuel Use?. Glasgow : University of Strathclyde, 2018. pp. 1-40 (Discussion Papers in Economics; 18-02).
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Figus, G & Swales, K 2018 'Can Vehicle Efficiency Beat Fuel Efficiency in Cutting Fuel Use?' Discussion Papers in Economics, no. 18-02, University of Strathclyde, Glasgow, pp. 1-40.

Can Vehicle Efficiency Beat Fuel Efficiency in Cutting Fuel Use? / Figus, Gioele; Swales, Kim.

Glasgow : University of Strathclyde, 2018. p. 1-40 (Discussion Papers in Economics; No. 18-02).

Research output: Working paperDiscussion paper

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Figus G, Swales K. Can Vehicle Efficiency Beat Fuel Efficiency in Cutting Fuel Use? Glasgow: University of Strathclyde. 2018 Feb 1, p. 1-40. (Discussion Papers in Economics; 18-02).